Debt Hamstrings Recovery by Tom Lauricellay - Article Example

Although the government has gone to the extent of lowering the interest rates in order to stimulate economic growth, the country is still under economic crisis. Interest rates indicate the price that people are willing and able to pay for credit. Low-interest rates indicate that people have more debt and they are not willing to continue borrowing.The article implies that interest rates, inflation rates, level of unemployment, and global oil prices are not sufficient indicators of a country’s economic growth.

This implication holds in the short-term but it is invalid in the long term. The author’s argument is therefore of little economic value. This is because such a variable is the only variable that a country can rely on to measure its economic progress. The variables also have a direct correlation with other direct economic indicators and hence reliable. Currently, interest rates, inflation, global oil prices, and unemployment rates are the only reliable indicators of a country’s economic growth.

If the author believes that the indicators are insufficient measures of a country’s economy, then he ought to have proposed other appropriate variables.