| Understanding Macro Conflicts for JC Economics – Quick recap | |
| Mr Koh discussed various economic policies, including tariffs, demand management policies, supply side policies, and exchange rate policy, and their impact on inflation and economic growth. He also emphasized the importance of understanding the root causes of inflation, the role of fiscal and monetary policies, and the concept of conflicts between macro objectives. Additionally, Mr Koh introduced the concept of supply-side policy and the need for rigorous analysis in understanding the pros and cons of different policies. To access TET’s summarised revision notes and application structures, sign up for a trial session here. | |
| Understanding Macro Conflicts for JC Economics – Next steps | |
| • Students to review and internalize the A3 exercise on inflation policy analysis. | |
| • Students to practice using the essay planner tool on thateconsplanner.com for macro goals and policies essays. | |
| • Students to study the conflicts between macro objectives using the TEE (Trigger, Explain, Evaluate) framework. | |
| • Students to read through the “conflicts.pdf” document in the shared folder for detailed explanations of macro policy conflicts. | |
| • Students to preview next week’s folder on “Conflicts continued” and prepare for discussing extent questions on policy conflicts. | |
| • Students to attempt the essay question on exchange rate policy and inflation control if time permits. | |
| • Mr Koh to send policy pros and cons notes to students via WhatsApp and Zoom. | |
| Tariffs and Economic Impact Overview | |
| Mr Koh provided an overview of tariffs and their economic impact, using the US market for cars as an example. He explained how tariffs affect domestic producers, consumers, and government revenue. Mr Koh discussed Donald Trump’s implementation of tariffs and China’s retaliation, highlighting the potential negative consequences for global trade and Singapore’s economy. He concluded by noting the high likelihood of a recession in Singapore and drew links to how businesses might adapt their strategies during an economic downturn. | |
| Inflation Drivers and Policy Impacts | |
| Mr Koh led an A3 exercise on inflation, instructing students to break down the problem into root causes and use color codes to represent each policy tool. The exercise involved identifying factors affected by each policy with circled factors representing policy pros, and uncircled factors representing policy cons. Mr Koh also discussed the drivers of demand-pull inflation, including disposable income, cost of credit, and expectations. Students were encouraged to identify factors affecting investments and net exports. | |
| Fiscal Policy’s Impact on Inflation | |
| Mr Koh discussed the factors affecting macroeconomic policies, specifically focusing on fiscal policy. He explained that fiscal policy can be used to lower demand-pull inflation by increasing personal income tax and corporate tax, which would reduce disposable income and post-tax profits. However, he noted that fiscal policy does not directly address cost-push inflation or external demand, and its effectiveness depends on the level of optimism in the economy. Mr Koh also mentioned that fiscal policy can have unintended consequences on other micro goals, such as public goods and healthcare. | |
| Fiscal and Monetary Policy Discussion | |
| Mr Koh discussed fiscal and monetary policies to address inflation, using visual aids to enhance retention. He covered the pros and cons of fiscal policy, including its effects on disposable income and government spending. For monetary policy, he focused on interest rates’ impact on consumption and investment. Mr Koh also touched on exchange rate policy, explaining how appreciation can lower import prices and cost-push inflation. He emphasized the importance of understanding these concepts for essay writing and provides additional resources to students. | |
| Exchange Rate Policy and Economic Growth | |
| Mr Koh discussed the concept of exchange rate policy and its impact on inflation and economic growth. He emphasized the trade-off between economic growth and employment, and the need for a short-run supply side policy to directly reduce production costs. Mr Koh also highlighted the limitations of long-run supply side policies, which take time to work and may not be as effective in addressing immediate needs. He encouraged the class to consider these points and think critically about the pros and cons of different policies. | |
| Supply Side Policies: Accommodating Demand and Cost | |
| Mr Koh discussed the workings of supply side policies, emphasizing their role in accommodating rising demand without inflation. He explained that short run SSP can tackle various forms of cost-push inflation e.g. arising from higher wages or costlier imports. Mr Koh also introduced the concept of supply-side policy, which is long-term, and contrasted it with short-term policies like the Jobs Support Scheme. He highlighted the importance of understanding the pros and cons of each policy. The conversation ended with a break, during which students were asked to plan their next steps. | |
| Understanding Inflation and Exchange Rate Policy | |
| Mr Koh discussed the importance of understanding the root causes of inflation in Singapore and the role of exchange rate policy in controlling it. He emphasized the need for a second policy, which could be supply side policy, and explained the workings of the policies. Mr Koh also highlighted the limitations of these policies and the need for rigorous analysis. He encouraged the participants to practice using the essay planner and provided resources for further study. | |
| Conflicts in Macro Objectives | |
| Mr Koh discussed the concept of conflicts between macro objectives, emphasizing that a trigger, such as a policy action, must occur for these conflicts to arise. He highlighted conflicts such as achieving actual growth versus price stability, and achieving sustained growth versus structural unemployment. Mr Koh also stressed the importance of identifying specific policy triggers responsible for these conflicts. | |
| Economic Policies and Their Effects | |
| Mr Koh discussed various economic policies and their effects on growth, unemployment, and balance of trade. He explained the concept of expansionary fiscal and monetary policies, and how they can impact national income and import spending. Mr Koh also highlighted the importance of specifying the workers displaced by structural unemployment and the need for long-term supply-side policies to sustain growth. He emphasized the need to evaluate the severity of conflicts between economic policies and their outcomes. | |
| Fiscal Policy Conflicts and Trigger System | |
| Mr Koh discussed the concept of conflicts in economic policy, focusing on the use of fiscal policy. He explained that conflicts can limit the scope for the use of fiscal policy and provided examples of different types of conflicts. He also introduced the idea of using a trigger system to identify relevant conflicts for a given policy question. Mr Koh emphasized the importance of understanding the implications of different conflicts and how they affect the use of fiscal policy. He also mentioned that he would provide more detailed notes on the topic in the future. To access these condensed revision notes and essay writing structures, sign up for a trial class here. |
