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
One of the most cited articles in economic integration literature is that of Abdel Jaber (1971). According to this study, welfare impacts of economic integration arrangements among developing countries should incorporate employment, productivity, and income effects in addition to the production and consumption effects. Furthermore, a number of studies have argued that economic integration among developing countries should not be treated as a tariff issue but as an approach to economic development. For instance, Roberson (1970) argued that the theories of economic integration have merely focused on gains of better resource allocation, whereas economic development is concerned with the employment of idle resources and better deployment of under-utilized resources to stimulate faster long-run growth. Another worth mentioning study is that of Mikesell (1965).
So, a more competitive economy is the one that is expected to grow more rapidly over the way to long term. The two dissimilar concepts of productive efficiency are: relative efficiency in manufacturing exportable goods and absolute point of production costs related to other countries. Relative efficiency doesn’t show competitiveness as a whole of different countries rather it clarify the paths of Global specialization in production whereas absolute production costs defined how successful countries are in global marketplace for individual goods [Irfan ul Haque
Before the 1990s, policy emphasis was more on the growth of an economy as an end and individual human beings were important only so long as they helped in achieving that goal of economic growth. But some economists realised that there had been a reversal between ends and means when it came to formulating the correct economic
Therefore, increasing the income level is the main concern of public policies. Until the endogenous growth theories, the traditional neoclassic approach - that underlined that the macroeconomic policies of the government are not effective on the economic growth - dominated the growth literature. On the contrary, the endogenous growth models take government expenditures in health, education, and social security and even in defense areas into account while modeling the growth of countries. However, the endogenous growth models have focused on the role of human capital as a key driver of economic growth which directs the public expenditures to invest in the human capital stock. The combination of the expenditures on human capital also matters in the endogenous growth models that there are important and direct relations between the government expenditures like education, health, social protection and social security and economic growth.
Numerous economists question the classical form of monetarism and instead give an alternative to what they presume would serve countries well. Keynesianism Keynesianism theory of economy, on the other hand, emphasizes that fiscal policy can play a significant role in stabilizing the economy (Kindleberger, 2013:14). Unlike in monetarism, Keynesianism advocates for higher government spending; especially during a recession, as this can help recover the economy quicker. Keynesians argue that it is ill advised for governments to wait for markets to clear, as classical economic theory suggests. Principles of Keynesianism and its Links to the
In order to be an entrepreneur, an individual must create something new and different from the existing products/services or of transmuted value. The success of any Innovation is built on the strengths and work of the entrepreneur executing it. In terms of (Schumpeter and Clemence, 1989) an entrepreneur plays a major role in the ‘Creative destruction’ process, by constantly assimilating unused knowledge in order to set up improved production functions and forms for the production and marketing the new products. Thus for any entrepreneur to demonstrate innovation as its key strength, it must execute the concept of the idea into practical usage by infusing sufficient resources such as capital and undivided support of the institutional leadership. (Bessant and Tidd, 2007) discuss in book Innovation and entrepreneurship talk about how Entrepreneurship and innovation can’t be assumed to be all about a bright idea.
The nature of public expenditure is important given that it determines the kind of impact it will have on the economy (Chen, 2006). It is broadly classified as either consumptive or productive Barro (1990); recurrent or development expenditure. Investment in sectors such as infrastructure, energy, health and education has a positive impact on the growth while consumptive expenditures should be optimised as they do not yield a net positive impact on the economic growth of a country (Agu, Okwo, Ugwunta, & Idike,
Technological development and management are considered to be key driving force in the development of any economy . The economic growth of both developed and developing countries depends on it . Hence, the concept of technology as a transformer for national development is jaded if not considered as a critical factor or element to be tackled by stakeholders in any nation. Consequently, what is technology? According to Oxford Advanced Learner's English Dictionary, technology is defined as "Scientific knowledge used in practical ways in industry, for example in designing new machine".
The role of FDI in recipient countries is suggested by several empirical studies as an important source of capital. Chowdhury and Mavrotas (2005), explain that FDI complements domestic investments, improves human capital, increases the level of technology, and stimulates overall economic growth in the host countries. However, some studies carried out at the level of firms such as that by Carkovic and Levine (2005), and that by Gorg and Greenway (2004), do not support the view that FDI plays a positive role by boosting growth in the host