The topic of global economic crises and their effects on financial markets has been a recurring theme in IELTS Writing Task 2, appearing approximately 3-4 times annually in recent years. Given the ongoing global economic challenges and market volatility, this topic is likely to remain relevant for future IELTS examinations.
Let’s examine one commonly encountered question type:
Some people believe that governments should intervene in financial markets during economic crises, while others argue that markets should be allowed to function freely. Discuss both views and give your opinion.
Analysis of the Question
This question requires candidates to:
- Discuss arguments for government intervention in financial markets
- Present views supporting free market operation
- Provide a balanced analysis
- Express and justify a personal opinion
Similar to should financial markets be more strictly regulated, this topic requires understanding of economic principles and their real-world applications.
Sample Essay 1 (Band 8-9)
The debate over government intervention in financial markets during economic downturns has intensified since the global financial crisis of 2008. While some advocate for strong governmental control, others maintain that market forces should operate independently. In my view, while complete non-intervention could be dangerous, government involvement should be carefully balanced and limited.
Proponents of government intervention argue that state involvement is crucial for maintaining economic stability. When examining the impact of international stock market fluctuations, we can see that uncontrolled market crashes can trigger devastating chain reactions throughout the economy. For instance, during the 2008 financial crisis, government interventions through bailouts and regulatory measures prevented a complete collapse of the banking system.
However, supporters of free market principles contend that government interference distorts natural market mechanisms. They argue that the impact of mortgage defaults on banking system could be better managed through market self-correction rather than artificial support. This view suggests that government intervention creates moral hazard and inefficient resource allocation.
In my opinion, a balanced approach is most appropriate. While complete market freedom could lead to destructive volatility, excessive government control might stifle innovation and economic growth. The key lies in establishing clear regulatory frameworks while allowing markets sufficient flexibility to function efficiently.
Therefore, I believe governments should maintain a supervisory role, intervening only when necessary to prevent systemic collapse, while otherwise allowing markets to operate freely within well-defined boundaries.
Sample Essay 2 (Band 6-7)
The question of whether governments should control financial markets during economic crises is widely debated. Some people think government control is necessary, while others believe in free markets. I will discuss both views and share my opinion.
Those who support government intervention have good reasons. When economic crises happen, many businesses and banks can fail. This can cause many people to lose their jobs and savings. Governments can help by making new rules and giving money to important banks and companies. For example, many governments helped banks during the 2008 financial crisis.
On the other hand, people who prefer free markets think government control is bad. They say markets can fix their own problems if left alone. When governments help failing companies, it might encourage risky behavior. Also, government intervention costs a lot of taxpayer money.
In my opinion, both sides have good points, but I think some government control is needed. Markets cannot always solve big problems by themselves. However, governments should be careful not to control too much. They should only help when really necessary.
Scoring Analysis
Band 8-9 Essay:
- Clear, logical structure
- Sophisticated vocabulary: “devastating chain reactions”, “moral hazard”
- Complex sentence structures
- Well-developed arguments
- Coherent paragraphing
- Effective use of examples
Band 6-7 Essay:
- Basic but clear structure
- Simple but accurate vocabulary
- Mix of simple and complex sentences
- Adequate development of ideas
- Some repetition
- Limited use of examples
Key Vocabulary
- intervention (n) /ˌɪntəˈvenʃn/ – action taken to improve a situation
- volatility (n) /ˌvɒləˈtɪləti/ – tendency to change rapidly
- systemic (adj) /sɪˈstemɪk/ – affecting an entire system
- moral hazard (n) /ˈmɒrəl ˈhæzəd/ – lack of incentive to guard against risk
- regulatory framework (n) /ˈreɡjələtəri ˈfreɪmwɜːk/ – system of regulations
Consider practicing with similar topics like role of international organizations in addressing poverty and how trade deficits impact financial markets to broaden your understanding of economic themes in IELTS Writing Task 2.