Economics Research Paper Example | Topics and Well Written Essays - 2000 words

Economics - Research Paper Example (Clark, (2006)) In the early 80's the economy experienced a recession and this was followed by an economic boom in the late 80's, the fiscal policy measures were aimed at imposing cyclical adjustment, the fiscal policy for the recession of early 80's was contractionary fiscal policy and this led to a reduction in public sector deficits. In the economic boom of the late 80's fiscal policies were expansionary was recorded following and surpluses of the late 80's were turned into deficits in 1990. Expansionary fiscal policies were used in the following years and this saw a further increase in deficit whereby a 5.5% of GDP deficit was recorded for the year 1992 and 1995, this increase in borrowing led to an increase in deficits whereby it reached 7.8% of GDP in the year 1993, there was a further decline in borrowing and in 1998 the economy recorded a surplus reaching 2.0% of GDP in the year 2000. From the above it is evident that in 1997 and 1998 and also for the year 2006 and 2007 sound policies were implemented and this was a reduction in borrowing leading to better economic growth and performance. (Clark, (2006)) From the above chart it is evid... In the economic boom of the late 80's fiscal policies were expansionary was recorded following and surpluses of the late 80's were turned into deficits in 1990. Expansionary fiscal policies were used in the following years and this saw a further increase in deficit whereby a 5.5% of GDP deficit was recorded for the year 1992 and 1995, this increase in borrowing led to an increase in deficits whereby it reached 7.8% of GDP in the year 1993, there was a further decline in borrowing and in 1998 the economy recorded a surplus reaching 2.0% of GDP in the year 2000. From the above it is evident that in 1997 and 1998 and also for the year 2006 and 2007 sound policies were implemented and this was a reduction in borrowing leading to better economic growth and performance. (Clark, (2006)) Part (b) Data plot for the years 1996 to 2006: (i) The public sector net borrowing The chart below summarises the public sector net borrowing for the year 1996 to 2006, data was retrieved from National Statistics (2009) From the above chart it is evident that in 1996 to 1997 public borrowing was negative, however public sector borrowing increased and for the year 1998 to 2001 public sector net borrowing was positive, this was followed by a decline in borrowing in 2002 to 2006 the public sector net borrowing was negative. This means that there has been cycles of increase and decline in the public sector net borrowing, this also shows that there are period of deficits and surpluses from the chart above meaning that in some years the government spending was less than income resulting into surpluses, while in the other period spending was greater than income resulting into borrowing. From