Topic Some economists argue that the government intervention

Topic: Some economists argue that the government intervention makes the economic outcome even worse. Some argue that there are important economic roles of the government. What is your opinion? Does the government do good or bad? Briefly discuss.

Solution

I think government intervention can have positive or negative effects on the economy, depending on the circumstances. In certain situations, government intervention is very beneficial for the economy. For example, during recession or depression, the government can conduct expansionary fiscal policies (by lowering taxes or increasing expenditure or by doing both) to stimulate the economy. Such a government intervention helps the economy come out of recession or depression, increase demand, income, and employment. So, government intervention during recession and depression have good effects. Also, government intervention may be good during other economic emergencies like stagflation or hyperinflation.

Government intervention might have negative effects on the economy when the economy is already stable and experiencing a stable growth. Government intervention during that time (through policy changes or other structural reforms) might derail the economy and have many negative effects.

So, government intervention can have positive or negative consequences depending on the situation.