The topic of inflation’s impact on public borrowing is a recurring theme in IELTS Writing Task 2. Based on an analysis of past exams and current economic trends, this subject is likely to appear frequently in future tests. Its relevance to global economic policies and its complexity make it an ideal candidate for assessing candidates’ analytical and writing skills. Let’s examine a relevant question that has appeared in recent IELTS exams:
Some people think that governments should borrow money to deal with the effects of rapid inflation. Others think that this is not a good policy. Discuss both views and give your opinion.
Analysis of the Question
This question requires candidates to:
- Discuss arguments for government borrowing during rapid inflation
- Explore reasons against this policy
- Provide a personal opinion on the matter
The topic combines elements of economics, public policy, and fiscal management, making it challenging and suitable for testing higher-level thinking skills.
Sample Essay 1 (Band 8-9)
Inflation, a persistent increase in the general price level of goods and services, can have severe economic consequences. While some argue that governments should borrow to mitigate its effects, others contend that this approach is flawed. This essay will examine both perspectives before presenting my own viewpoint.
Proponents of government borrowing during inflationary periods argue that it can provide immediate financial relief to citizens and businesses struggling with rising costs. By injecting borrowed funds into the economy, governments can implement short-term measures such as subsidies, tax cuts, or direct payments to help cushion the impact of inflation on vulnerable groups. Moreover, strategic borrowing can finance investments in infrastructure or productivity-enhancing projects, potentially boosting economic growth and reducing inflationary pressures in the long run.
On the other hand, critics of this approach highlight several potential drawbacks. Firstly, increased government borrowing can exacerbate inflation by further expanding the money supply, potentially creating a vicious cycle of rising prices and debt. Secondly, accumulating public debt during inflationary periods may lead to higher interest payments in the future, straining government budgets and potentially necessitating austere fiscal measures. Lastly, excessive borrowing could undermine investor confidence in the economy, leading to currency depreciation and additional inflationary pressures.
In my opinion, while government borrowing can be a useful tool in managing the effects of rapid inflation, it should be approached with caution and as part of a comprehensive economic strategy. The key lies in striking a balance between providing necessary support and avoiding excessive debt accumulation. Governments should prioritize targeted borrowing for productive investments that can enhance economic resilience and growth potential. Simultaneously, they should implement complementary measures such as monetary policy adjustments and structural reforms to address the root causes of inflation.
In conclusion, the decision to borrow during inflationary periods is complex and context-dependent. While it can offer short-term relief and finance growth-enhancing initiatives, the risks of exacerbating inflation and accumulating unsustainable debt cannot be ignored. A nuanced approach, combining judicious borrowing with broader economic reforms, is likely to be most effective in navigating the challenges posed by rapid inflation.
Sample Essay 2 (Band 6-7)
Inflation is a big problem for many countries, and governments have to decide how to deal with it. Some people think borrowing money is a good idea, while others disagree. This essay will look at both sides and give my opinion.
Those who support government borrowing during inflation say it can help people and businesses right away. The government can use the borrowed money to give financial help to those who are struggling with high prices. For example, they might reduce taxes or give money directly to poor families. Also, the government can use borrowed funds to invest in important projects like roads or schools, which could help the economy grow in the long term.
However, there are also arguments against borrowing. One problem is that it might actually make inflation worse by putting more money into the economy. Another issue is that the government will have to pay back the loans with interest, which could be difficult in the future. Some people worry that too much borrowing could make other countries lose trust in the economy, which could cause more problems.
In my opinion, I think governments should be careful about borrowing during inflation. While it can help in some ways, it’s important not to borrow too much. Governments should only borrow if they have a good plan for how to use the money to really help the economy. They should also try other ways to fight inflation, like changing interest rates or making new laws to help businesses.
To conclude, dealing with inflation is not easy, and borrowing money is just one option. Governments need to think carefully about the good and bad points of borrowing and make sure they have a good overall plan to manage the economy.
Sample Essay 3 (Band 5-6)
Inflation is when prices go up a lot. Some people think the government should borrow money to help when this happens. Other people think this is not good. I will talk about both ideas and say what I think.
People who like borrowing say it can help people quickly. The government can give money to poor people or make things cheaper. This can help when everything is expensive. Also, the government can use the money to build new things like roads. This might help the country make more money later.
But some people don’t like this idea. They say borrowing might make prices go up even more. Also, the government will have to pay back the money later, which might be hard. Some people think other countries might not trust us if we borrow too much.
I think borrowing can be good sometimes, but not always. The government should be careful and only borrow if they have a good plan. They should also try other ways to help with inflation, like changing bank rules.
In the end, dealing with inflation is hard. Borrowing money might help, but it’s not the only answer. The government needs to think carefully about what to do.
Explanation of Band Scores
Band 8-9 Essay:
- Fully addresses all parts of the task with a well-developed response
- Presents a clear position throughout the response
- Uses a wide range of vocabulary with very natural and sophisticated control of lexical features
- Uses a wide range of structures with full flexibility and accuracy
- Demonstrates high levels of coherence and cohesion throughout
Band 6-7 Essay:
- Addresses all parts of the task, though some parts may be more fully covered than others
- Presents a relevant position, though conclusions may become unclear or repetitive
- Uses an adequate range of vocabulary for the task, with some inaccuracies in word choice and spelling
- Uses a mix of simple and complex sentence forms, with some errors that do not impede communication
- Arranges information coherently and uses a range of cohesive devices, though not always appropriately
Band 5-6 Essay:
- Addresses the task only partially, with limited development of ideas
- Expresses a position but the development is not always clear
- Uses a limited range of vocabulary, with noticeable errors in word choice and spelling
- Uses only a limited range of structures, with frequent errors that may cause some difficulty for the reader
- Presents information with some organization but there may be a lack of overall progression
Key Vocabulary to Remember
- Inflation (noun) – /ɪnˈfleɪʃən/ – A general increase in prices and fall in the purchasing value of money
- Mitigate (verb) – /ˈmɪtɪɡeɪt/ – Make less severe, serious, or painful
- Exacerbate (verb) – /ɪɡˈzæsərbeɪt/ – Make (a problem, bad situation, or negative feeling) worse
- Fiscal (adjective) – /ˈfɪskəl/ – Relating to government revenue, especially taxes
- Austere (adjective) – /ɔːˈstɪər/ – Severe or strict in manner, attitude, or appearance
- Resilience (noun) – /rɪˈzɪliəns/ – The capacity to recover quickly from difficulties; toughness
- Accumulate (verb) – /əˈkjuːmjʊleɪt/ – Gather together or acquire an increasing number or quantity of
- Depreciation (noun) – /dɪˌpriːʃiˈeɪʃən/ – A reduction in the value of an asset over time
- Subsidies (noun) – /ˈsʌbsɪdiz/ – Money granted by the state or a public body to help an industry or business
- Productivity (noun) – /ˌprɒdʌkˈtɪvɪti/ – The effectiveness of productive effort, especially in industry
Conclusion
Understanding the impact of inflation on public borrowing is crucial for IELTS candidates, as it combines economic concepts with policy analysis. The sample essays provided demonstrate different approaches and levels of sophistication in addressing this complex topic. To improve your writing skills, try crafting your own essay on this topic and share it in the comments section for feedback. Additionally, be prepared for related questions that might appear in future IELTS exams, such as:
- Discuss the long-term consequences of government borrowing during economic crises.
- Some argue that inflation can be beneficial for certain sectors of the economy. To what extent do you agree or disagree?
- Compare and contrast the effectiveness of monetary and fiscal policies in controlling inflation.
By practicing with these types of questions, you’ll be better equipped to handle complex economic topics in your IELTS Writing Task 2.
For further insights on related economic topics, you might find it helpful to explore the role of public policy in addressing global inequality and the impact of inflation on public debt. Additionally, understanding the effects of inflation on financial markets can provide valuable context for your essays on economic themes.