6 thoughts on “Student-Raised Discussion Topics”

1. What do you guys think are effective ways for the Fed to partake in quantitative easing? Since interest rates are already near zero the Fed has to find other ways to stimulate the economy.

   This link breaks down clearly the latest quantitative easing measures taken by the Fed:
   http://www.bbc.co.uk/news/business-20334488

   • The fed still has other tools such as setting the fractional reserve allowing banks to lend more and increase the flow of capital. I think another question to consider is if it should be the Fed’s job to simulate the economy at all. After all the stated goals of the Federal Reserve is to maintain the value of the currency, does that include intervening as a macroeconomic function?

   • Ian, good point! Indeed, there are many tools the Fed can provide more money supply by purchasing government’s bonds and supporting other fiscal spending as well, in addition to lowering interest rates.

     I think the Fed needs to take more responsibility to recover from the crisis. A crisis situation should be tackled more decisively than during a normal economic situation. Of course, Ian, strong opposition views against the artificial intervention are out there.

2. Do you guys think that the WTO like the world bank and the IMF are institution created to favor rich countries and harm developing countries who have less negotiation power? isnt it a new form of neo colonialism

   • Sure, it can be viewed from a neo-colonial perspective. But, a critical problem is, what other alternative options (or orders) we can create in the near future. DO those developing countries need to maintain an autarky or cut off all economic relations from the existing order? Alternative options are quite limited, unfortunately.

   • You got a good question there Mohamed. I wouldn’t say that it is a new form of colonialization. I wouldn’t. The developed countries do have an advantage in all 3 institutions BUT what I think is that no one has forced the developing countries to be a part of any of the organization or do any trade with the developed nation. The developed nation has all rights to dominate in the world because of them being developed, being strong, being powerful, having a strong economy etc. etc. The developed nation has earned that for themselves. The developing nation has their own incentives to be a part of these institutions too. The developing nation gets recognition in the world, their wealth increases through trade, and they get help from these organizations when they need help. These are the incentives of the developing nations. So, if they want what they being offered by being a member of these institutions they should go for it.

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