The unemployment rate based on the Bureau of Labor Statistics from the 1960 - 1961 peaked at 7.1% which the 1960s are considered to be a recession because of the decrease in real GDP and the increase in unemployment. Based on the federal reserve during 1950s - 1960s, the Federal Reserve followed a monetary policy that worked toward to keep both inflation and economic growth reasonably stable, this shows that monetary policies can also cause a recession which means that keynesians economics can actually be an economic disaster. This is significant
Authors adds threshold values of total credit to the private sector and deposit money bank assets, above which the total effect of remittance on growth is positive. Azam and khan (2011) Running the linear regression of two remittance receiving and same features countries i.e. Azerbaijan and Arminia. They empirically proves that workers remittance are significant for the acceleration of growth in the field of study. Recommending to formulate the policies and encouraging to utilize more efficiently in order to improve society living standard.
The simulations give rise to the impulse functions that describe the behavior of endogenous variables such as the monetary policy rate, change in real GDP and inflation over an extended period of time in response to the initial shocks. Figure 4, 5 and 6 display the impulse functions of R_t , (y_t ) ̃ and π_t with respect to the negative demand shock, particularly to the burst of housing bubble and corresponding reduction in a_t parameter. Figure 4 shows that the monetary policy responded to the shock by a sharp decrease in R_t followed by a gradual increase to prevent the economy from overheating. Reduction in R_t makes intuitive sense: since the negative demand shock reduced the output, the Fed lowered the real interest rate to stimulate investment and make up for the reduction in a_t parameter. It is also interesting to note that once the output gap turned positive, R_t began rising to keep output at the potential.
In infrastructure development, the government has helped a lot to the developing countries, thereby gaining an opportunity to Nike expand the range of market. As the result of political analysis, Nike Inc has opportunities to expand Nike footwear market in global. Economic Analysis Economic recession is the biggest threat for the Nike. Nike. Inc has faced treat which is financial crises of 2008
U.S. economics professor Robert Gordon attributes the recent slowdown in economic growth in the U.S. to four main headwinds: demography, education, inequality and government debt. This paper will analyze two of these headwinds, demography and education, both of which are connected to innovation positively or negatively. The first headwind is demography. In general, the U.S. population is projected to grow more slowly in future decades than in the recent past, which will result in a decline in labor force participation. These demographic changes have a significant impact on economic growth.
The Keynesian View of the AD/AS Model uses an SRAS curve (see figure1), which is horizontal at levels of output below potential and vertical at potential output. Look at the AD/AS figure, for the potential output (Yp), if AD decreases, output is changed but price is constant while increase in AD affects only prices and output is kept constant. Then economy begins at intersection of AD and SRAS at P0 and Yp, starting from the potential out level (Yp) which presents full employment in economy, thus AD is volatile and can fall easily in the recessionary gap, Therefore economy remains in equilibrium (Y1) but below full employment and Keynes supposed that for certain period, the economy will hold recession gap with targeted rate of
Even the international companies bring considerable economy growth to developing countries such as technology transfer and job opportunity. Nevertheless, the multinational corporations also bring problems to developing country like harm human right. However, it is believed that multinational companies bring advantages morn than disadvantages. The developing country should increase the economy in the short term because competed economy can enhance competitive strength in the world and ameliorate the life of developing country people such as using additional finance develops capital
Foreign direct investment (FDI) include foreign ownership of productive assets, such as textile factories, mines and land. Due to increasing foreign investment one country can compete an international level and hence FDI is a important measure of increasing globalization. Any shape of Investment brings a progressive outcome in an economy, May on national level or international level. Now a day’s foreign direct investment (FDI) is very important part of international economics. IN case of Pakistan where markets and economy are developing so in this case Pakistan is much need of foreign investment.
However, recently, the Robin tax was raised again because of the financial tsunami in 2008. A lot of European economies were affected by the speculation of investors. Investors trade with exchange rate and they just speculate in the short term. This may lead to huge fluctuation of exchange rate and instable system. Therefore, James Tobin claimed that the objective
CHAPTER 2 LITERATURE REVIEW INFLATION (InvestorWords, 2015) stated that inflation is the increase in the general price level of goods and services in economy, normally caused by excess supply of money. Inflation usually measured by the Consumer Price Index (CPI). When the cost of producing goods and services goes up, the purchasing power of dollar will decrease. A customer will not be able to purchase the same goods and services as he/she previously could. Inflation rate of 1-2% per year are acceptable and even desirable in some ways (Investopedia, 2015).