Macroeconomics Of A Stable And Sustainable Economic...

The role of macroeconomics in national economies is the creation of a stable and sustainable economic environment. The government is able to play this rule by using monetary policy interventions. The monetary policy makers often act independently to correct instability in the economy or to ensure that stability continues. The 2008 recession led to an intense debate over the ability of monetary policy to stimulate the economy when the interest rates are already below zero. A majority of the people who engage in discourse on the matter seem to believe that its ability is greatly undermined in such a scenario. However, an evaluation of the response by the Federal Reserve of the United States of America and other governments demonstrates that it can indeed help to revive the economy. Furthermore, the other alternative to monetary policy intervention is fiscal policy that has many political and other issues to consider. As a result, the former is the most effective and easiest response to a weak economy. In order to appreciate the full effect of monetary policy measures in a weak economy characterized by low interest rates, the evaluation of both theoretical and empirical evidence is required. In addition, it is essential to understand the factors that motivate bankers and other financial institutions to invest at a particular time. Literature Review According to Bernanke and Blinder (1992, p. 903), the monetary policy affects the credit channel that significant affects theShow MoreRelatedNotes On Macroeconomic Policy And Monetary Policy974 Words   |  4 PagesReorienting macroeconomic policy Feb 12th 2010, 16:33 by S.D. | WASHINGTON This article is written from a positive standpoint it also discusses Blanchard and Co.s list of the oversights and mistakes of Great Moderation macroeconomics and macro policy. Which include some items I will discuss such as: fiscal policy, monetary policy, monetary policy focused exclusively on inflation and used only one target the policy rate, and financial regulation was in its own silo, outside the macro policy frameworkRead MoreThe Government Should Play an Active Role in Managing an Inflationary Economy983 Words   |  4 PagesI agree that the government should play an active role in managing an inflationary economy. Buck (2011), stated that â€Å"The overwhelming majority of economists around the world believe it is appropriate for the government to take actions to promote economic growth and maintain low unemployment and low inflation.† Parkin (2012: 522) described inflation as â€Å"a persistently rising price level† and price level as â€Å"the average level of prices, and the value of money†. A price increase would cause peopleRead MoreHow Companies Maximize Profits1591 Words   |  6 Pagesconsumers’ demands. However, there are number of economic factors that hinder this operation. These factors are government regulations, rate of interest, exchange rate, trade cycles, general price level, employment and income, economic growth, and supply and demand. Economics consists of macroeconomics and microeconomics. The former analyses national economy and offers knowledge about the business environment (Samuelson Nordhaus 2010, p.5). Macroeconomics centres on the overall economy rather than theRead MoreEssay on India on the Move833 Words   |  4 PagesWhy did India experience relatively slow economic growth from independence until 1991? India became an independent country in 1947 and from that moment until the first years of the 1990’s, the government adopted the Import Substitution Industrialization model (ISI) in order to protect the economy against foreign competition. The model was based on regulations in the private and public sector, trade and foreign direct investment that made the economy very closed compared to other economies in theRead MoreThe Role of Private Sector in Social and Economic Development1172 Words   |  5 Pagesthat the private sector plays in social and economic development led the International Labour Conference to discuss the concept of sustainable enterprises in June 2007. The promotion of sustainable enterprises ensures that human, financial and natural resources are combined equitably. An environment conducive to the creation and growth of enterprises on a sustainable basis must take into account the three dimensions of sustainable development – economic, social and envi ronmental – as interdependentRead MoreDescription Of A Quest For Quality851 Words   |  4 Pagesimprove social outcomes. Looking for better conditions to the society, the article stated that a high growth does not mean an improvement in social outcomes. The authors brought the information that many countries in the last decade have shown a strong economic growth, however, they could not extinguish poverty, inequality and unemployment, indicators that besides the growth still unsatisfactory. Inclusive growth concept The main pillars of a quality growth, also called as good growth, must include qualityRead MoreWhat are the main causes of high unemployment in Zimbabwe? How serious a problem is it? Will land resettlement and HIV-AIDS ease or worsen the situation? Give reasons.1516 Words   |  7 Pageson a programme of Economic Reforms popularly known as Economic Structural Adjustment Programme (ESAP) and 1991-1992 saw one of the worst droughts. With close to 70% of the population living in the rural areas (CSO 1992) and dependent on agriculture for their livelihood, this constituted a major disaster. One result of these events was increased migration to the urban areas by people in search of employment. A further drought in 1995-1996 compounded the effect. Worsening economic conditions plus everRead MoreA Turning Point For Morocco s Political System1455 Words   |  6 Pagesstate institutions and very little importance was given to sound economic policy (Ali, Ben 2007). In 1982 the financial cri sis helped in sparking interest in their economic issues leading to adjutments in the structure of liberalization and privatisation in order to get foreign direct investments (FDI). The reforms were aimed at trade and credit and they took away import quotas and tariff rates were reduced to create a better environment for FDI that required guarantees for property and contract rightsRead MoreGovernements Use Fiscal Policy to Help Them Achieve Their Macroeconomic Objectives Explain What Is Meant by This Statement and Discuss Specific Fiscal Measures That the Uk Government Has Implemented in Recent Years to1832 Words   |  8 PagesEssay Economy, Society and the Built Environment ‘Governments use fiscal policy to help them to achieve their macroeconomic objectives’ Explain what is meant by this statement and discuss specific fiscal measures that the UK government has implemented in recent years to influence economic activity in the built environment. Definitions: FISCAL POLICY: â€Å"A combination of government spending and taxation used to achieve macroeconomic management. (The flow of government money in and out ofRead MoreGlobal Economic And Environmental Sustainability1989 Words   |  8 Pagesin population came a major growth in economic and financial activity that is increasingly more global and complex (Ayres et al., 2013). To compensate for this growth in population and economic and financial activity, the use of natural resources has risen at a similar rate. Although continuous economic growth is the primary goal of an economy, the finite amount of resources constrained by the capabilities of the ecosphere makes continuous exponential economic and population growth impossible. Currently