THEORETICAL FRAMEWORK 2.1. Inflation and Economic growth Theoretical discussion From many years ago, the relationship between inflation and growth was a debatable topic among economists. More economic theories were developed by various theorists and schools to explain relationship between inflation and growth. These theories are founded on various study of the phenomenon but no theory gives full explanation. The former inflation-growth theories were built on cyclical observations.
As aggregate demand affects the supply (production, employment and inflation) they saw it as the government's role to build it back up using monetary and fiscal policies. Similar to Classical economists, Keynesian believe the economy comprises the same part: consumer spending, government spending, and business investments. However the major difference is that Keynesians believed government spending could help account for the lack of consumer spending and investment. The Keynesian theory also was based on the idea that wages and prices were sticky and that is would give aggregate supply a horizontal line in the short run. Overall, the main idea of the Keynesian Economist was to save and create jobs and
This theory expresses that immigration is driven by demand built into the economic structure of the well-developed industrial societies. As the literature in the well developed markets we see a labor market which on one hand offers jobs with high pay, benefits, good working conditions, while on the other hand we see a secondary job market characterized by low pay, few to no benefits, hazardous or unpleasant working conditions and instability. Typically, within the developed society, natives are not willing to take these jobs in the secondary market where there is little to no return to education, experience, or skill. Thus the shortage of laborers encourages irregular
The Neoclassical theory states that the major cause of migration is different pay and access to jobs even though it looks at other factors contributing to the departure, the essential position is taken by individual higher wages benefit element. The Neoclassical theory involves the macroeconomic and microeconomic aspect. Macro focusing on structural factors and microeconomic focusing on an individual choice to migrate (Weiss, 2003). The macro theory is perhaps the most well-known approach explaining the causes of migration, it came from the theoretical model explaining internal labor migration in light of economic development (Corry 1996, Harris and Todaro 1970). According to the theory assumptions: 1.
the gap between the wages of the skilled and unskilled labourers. ‘Skill premium’ has a positive meaning which involves incentive to earn a skill and receive a premium in lieu of the same thereby making it a skill premium. Now looking at other side of the same coin,we define wage inequality as the gap between the wages received by skilled labourers compared to those received by unskilled labourers and this denotes a negative meaning. So different authors in their studies have used these words according to the strand of literature they
Keynesians who are also known as neoclassical synthesis develop their theory which considers some of ideas from the general theory. In their theory they develop a view that in short run output is influenced by aggregate demand especially in some economic disastrous such as depressions (Felderer and Homburg 1992:
It will also look at the causes and the effects if unemployment, the rate of unemployment in Saudi and the prevalence of unemployment in various sectors of the economy. The paper will also look at solutions to the problem of unemployment and recommendations that are intended to solve this issue. Unemployment is a situation where an individual who is willing and able to work is not able to get a job. The different types of unemployment include cyclical unemployment, frictional unemployment, classical unemployment and structural unemployment. Classical unemployment occurs when the wages associated with jobs are set above the market level such that there are high numbers of job seekers that exceeds the available vacancies.
TOPIC: THE IMPACT OF MINIMUM WAGE LEGISLATION ON EARNINGS AND EMPLOYMENT ABSTACT This paper will discuss the meaning and impact of minimum wage legislation on earnings and employment. It will give theoretical explanation on how the fixing of minimum wage will affect the workers in the labour market, especially the low wage workers. It will explain how the labour market will react with an increase in the minimum wage legislation. INTRODUCTION The concept of minimum wage is an age-long economic issue that has been repeated over periods and economic cycles. Minimum wage however has been the subject of economic discourse over the years in different countries even before the international Labour Organization (ILO) was created ( Hyginus 2010).
This data collection should allow this study to acquire an acceptable level of trustworthiness, even when taking into considerations some limitations that may occur. Section 1: Introduction Introduction Unemployment as an economic problem exists in each countries and it is often a measure of the health of the economy. It is known as waste of scarce economic resources and as a result it decreases the future growth potential of the country’s economy (Riley, 2005). It is essential to understand the factors which causes the unemployment and its relation and impacts to other economic issues. For instance, of the causes are considered the extreme unemployment benefits, excessive minimum wage and hiring cost, too high real wages level, the disparity between the unemployed labour and job offers on the market in terms of skills and many others reasons (Bell, 2000).
CITY UNIVERSITY COLLEGE OF SCIENCE & TECHNOLOGY MASTER OF BUSINESS ADMINISTRATIVE RESEARCH PROPOSAL NAME: LIEW WEN MIN I/C NO: 880101-35-5088 TITLE: UNEMPLOYMENT IN MALAYSIA LECTURER’S NAME: DR SEGAR RAJA MANICKAM Chapter 1 Introduction In this contemporary world, unemployment is a common issue which facing by many developing country. When one country with high unemployment rate, this directly means that the country labour resources are not fully utilized. Basically, a country that is not fully utilizing its resources will not achieve their maximum output. Hence, full employment need to be considered as macroeconomic goals if a country wants to maximize its output. As compared to other developing country, Malaysia can be said