Macroeconomics - Case Study Example

Only on StudentShare

Extract of sample

In other words, the level of investment determines the level of saving and not the other way around (Michl 2002, p.43). The point has been argued for the next 70 years and both theories have at times fallen in and out of favour.
Thomas Palley of the AFL-CIO wrote in a 1996 paper that, "The view that saving causes investment is widely identified with classical macroeconomics, while the view that investment causes saving is widely identified with Keynesian macroeconomics. However, deeper inspection reveals that both theoretical perspectives are capable of producing bidirectional causality, and this limits the usefulness of theory for resolving this crucial matter" (p.5). Supply side economics has run headlong into the demand side theories and have resulted in numerous, and yet valid, academic arguments on both sides. According to theory, "...saving can never be different from intended investment, in equilibrium" (McCain 2007). The Paradox of Thrift is one explanation, though not the only one, of how savings can influence an economy's production and increase the unemployment rate.
Supply side economics maintains that the marginal tax rate, the rate at which the next dollar earned is taxed, directly influences people's propensity to wo ...Show more


In John Maynard Keynes's 1936 groundbreaking book titled The General Theory of Employment, Interest, and Money Keynes parted ways with the classical view of economics and investment by putting forward the Paradox of Thrift (cited in Chamley 1984, p.1,2). Until that point in time it was the widely held belief that savings resulted in increased investment in the capital structure and would stimulate the economy…
Author : legrospansy
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"Macroeconomics Case Study"
with a personal 20% discount.
Grab the best paper

Related Essays

Individual Case Study Assessment ( Faslane case study )
This paper explores such changes as reported in the Helensburgh Advertiser on 29, April 2010, with regard to Faslane. It explores the structural and organizational changes at Faslane a Naval Base Clyde, which forms the home to nuclear submarines that carry Trident weapon system.
8 pages (2000 words) Essay
Poverty and Pollution Case Study
Numerous business firms in US have highly contributed to the environmental pollution (Shaw, 2011). Ethics in business refers to study of morality of choices, right and wrong. Moreover, business ethics involves moral standards application, in business situations.
7 pages (1750 words) Essay
Case study
The strategies and their needs are entirely dependent on the operations of organisations. It has been further noted that effective strategies also enable organisations to have an upper hand over their competitors in the business. Acquisition or alliance with other organisations is one the most reliable strategies in the modern day business perspective.
9 pages (2250 words) Essay
Case Study
Established in the year 1981, the Hotel was basically renowned for its initiatives taken to sustain within the environment, which is degrading continuously due to the human activities. On further analysis, it has been observed that, the benefits, which the hotel derived by implementing the initiatives associated with the environmental sustainability represents non-disruptive and cost reducing operational activities such as recycling program, non-toxic cleaning product, promotional material printed on thee recycle paper helps in advertising the hotel amid its customers resulting in attracting more customers.
5 pages (1250 words) Essay
Case study
The other pertinent issues that the new CEO face involves assessing the company’s business strategy and whether it is headed in the right direction in terms of adapting to the slow market as the global trade picks up. In terms of achieving the milestone of becoming a sustainable leader in the business of container shipping, the new CEO is also faced with the dilemma of implementing such an initiative in a commoditized industry.
8 pages (2000 words) Essay
Government spending is comprised of public expenses to finance projects to the benefit of the whole economy. Examples are bridges, schools and other public infrastructures. Net export, on the other hand refers to the inflow and outflow of goods and services in the economy.
6 pages (1500 words) Essay
Macroeconomics Analysis
Macroeconomics analysis majors on particular product in a broad economic view, on its market forces, economic impacts and effects on other similar products (Gillman, pg.73). My neighbor Cindy has planned to start
7 pages (1750 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email