Business cycle The business cycle measures the expansion and contraction of economic activity over a specific period of time. The cycle consists of four component which are namely the; trough, upswings, a peak and downswings (Mohr, 2015:411) 2.4. Cause of business cycles According to the monetarists business cycles are brought about exogenous factors which are outside influences such as faulty government policies. These influences induce instabilities in prices, production and unemployment, these economist believe that should the government not intervene in the market system, market forces can be given a chance to correct their own economic dysfunctions. Whoever Keynesians economists believe that endogenous factors such as the multiplier, interest rates and foreign exchange cause business cycles and encourage government intervention to smoothen out the cycles.
Durkheim identified this change through the division of labour which he believed would lead to anomie -the breakdown of morality in society- (Barbaris and Jones: 2011). Durkheim (1893: 276) argued that “the division of labour unites at the same time that it opposes” because though the concept of a division of labour rids society of simple mechanic solidarity, thus opposing the simple way of life that was found in a pre-industrialised society, by having industrialisation, it allows for the build-up of a new way of collective conscience. In a similar vein, according to his manifesto (Marxists.org), Marx also believed in the division of labour, thinking that industrialization made the dichotomy between the proletariat and the bourgeoisie much more apparent. Like Durkheim’s concept of anomie and the breakdown of norms, Marx argued that the division of labour encourages alienation leading to a feeling of disassociation among the labourers with the product of their labour, due to it all being monopolised by the bourgeoisie. Yet, unlike Durkheim, Marx thought that the division of labour would promote less autonomy and minimise their collective conscience, therefore leading them to think they need the support of their employer rather than their
This essay will aim to highlight and argue Adorno’s theories in which portray his understanding of a contemporary society. Factors such as capitalism, popular culture, mass culture and leisure time will be explained and developed further in understanding his contemporary society understandings. Capitalism plays a big role in contemporary societies along with Adorno’s ideologies. It has “absorbed the opposing voice” (Adorno, p.135). What the philosopher means by this is that the ruling class takes away our voice and the everyday people are exploited.
Answer the following questions to the best of your ability. 1. What is the difference between micro and macroeconomics? Give an example of a microeconomic phenomenon and an example of a macroeconomic one. The difference between comes from the scoop we are looking to the economic situation (that why micro and macro), the macro-economy is focusing on the situation and action on the individual agent when the macro-economy is focusing and the evolution and situation of the whole economy.
Different schools in economic literature have proposed various relationships between money and other macroeconomic variables. Before the real business cycle theory, the prevailing thought was that aggregate demand and money stimulus, such as monetary shocks, would have a significant effect on the real economic activity, implying that money would cause economic activity. The concern among the Keynesians, the monetarists, the new classicals and the new Keynesians were not whether monetary shocks had any effect on output but the nature and the transmission mechanisms of these shocks. The Keynesians argued that money changes would influence both economic activity and price level through the interest rate and investment. The monetarists agreed with Keynesian transmission channel in the short run but in the long run they came to the same result with classical economists that money is neutral.
Marxists had undervalued the vital importance of nationalism, the state and war, and the implication of the balance of power, international law and diplomacy for the structure of world politics. Marx and Engels, perceptive nevertheless they were about the march of capitalist globalization and growing economic disparities, could not have predicted. For instance, Lenin supposed that capitalism initiated national disintegration as well as extraordinary advances in globalization, but that does not essentially mean that Marxism suggestions the best description of how globalization and disintegration have outspread in cycle in modern times and particularly
You might have heard the terms “capitalism” and “socialism”, when you are studying economics. But, did you know that there are different models within capitalism and socialism? Yes, there are certain models based on whether the country’s economy is market oriented or socialist in nature. In the present times of recession and fiercely competitive market environment, it is very interesting to know the nature of different economies in the contemporary global economy. Before we learn about the different models of capitalism, let us acquaint ourselves with some basic terms pertaining to different types of economies that were prevalent in the past, and that are seen in the contemporary global economy.
and these are either the creation of dominance effects in the amount of money or the amount of payment methods to suit the surrounding economic conditions. The aim of this is to influence either absorb excess liquidity or cash injection stream of new economy. Interest has been evident in the monetary policy of economic thought during the last century, then taking this attention especially during the monetary crisis and economic instability, which witnessed this century is growing. Monetary policy is seen as an essential part and an important part of economic and public policy of the state components. The evolution of the concept of monetary policy, the evolution of ideas and theories across time successive
The profit value of a firm depend on aggregate demand, national income and general price level. Similarly, the help of Micro-economics is inevitable for Macroeconomics. For example, nation output and income are the sum of income of million individuals and numerous firms respectably. Hence, the theory of the study of individual units and aggregate are both equally important. If we analysis Macroeconomics variable and its relationship, we must also allow for changes in Microeconomic variable, that can affect the Macroeconomic variables.
Economists may disagree on the validity of alternative positive theories of how the world works or may have different values and thus have different qualitative perspectives on what policy should try to achieve. Economists like social scientists, so economists try to understand and predict the impact of economic forces by using the first scientific method developed by physicists. Scientific methods are a common way to systematically check what works and what does not work. An economist starts with a question or a puzzle about causes and consequences arising from some observed facts. Standard economists with active economists sometimes disagree on assumptions and models as well as on policy use.