Explain the Rise and Fall of Keynesianism Essay

Explain the Rise and Fall of Keynesianism - Essay Example According to the essay "Rise and fall of Keynesianism" findings, Keynesianism suggests that often private sector decisions cause inverse macroeconomic outcomes and hence it is suggestible for the public sector to deliver active policy responses which mainly include central bank’s monetary policy actions and government’s fiscal policy actions. Keynes argues that these activities would assist the economic sector to stabilize output over the business cycle. Although Keynesian theory can be stated thus in simple terms, it comprises larger ideas. To illustrate, Keynesianism has a close similarity with the concept of ‘General Glut’ proposed by classical economists. However, it is identified that classical economists had the disagreement regarding the conditions of the general glut as some of them believed in Say’s law â€Å"supply creates its own demand† (Best, n.d.). In contrast, Keynes argues that insufficiency in aggregate demand for goods can be featured as the direct cause of general glut which would lead to economic decline and subsequent unemployment difficulties. In this situation, Keynesianism recommends (as cited in Blinder) that thoughtful governmental policies can easily overcome such crises if these policies are effectively employed to increase the aggregate demand. This, in turn, would mitigate the adverse impacts of unemployment and deflation. Similarly, Keynesian economics brings some theoretical basis for a crucial distinction between involuntary unemployment and voluntary unemployment. ... This in turn would mitigate the adverse impacts of unemployment and deflation. Similarly, Keynesian economics brings some theoretical basis for a crucial distinction between involuntary unemployment and voluntary unemployment. From the Keynesian point of view (as cited in Knoop, 2010, p.40), the individuals who seek jobs at the existing wage rates can be grouped into involuntary unemployed. Corry (n.d.) reflects that Keynes’ innovative concepts produced some revolutionary changes in the economic sector since the traditional economists believed that unemployment was resulted from certain labour market rigidities such as ‘excessive wage claim, trade union activities, and unemployment pay’ (ibid). According to Keynesianism, the increasing unemployment rate can be directly attributed to the failure in total spending caused by the inefficient business decisions of private firms. Therefore, it is obvious that government has to play a crucial role in formulating efficien t growth policies which would facilitate sustainable economic growth of the country. In short, Keynesian economics constitutes a demand based economy (Reference for Business). Limitations The Keynesian economics gave greater emphasis on employees’ wage rates without considering the profitability of the firm. Although, it had aided the nation to ensure employee welfare, the constancy of this system was always subject to change. For instance, sometimes, international competition adversely affected the capital requirements and public expenditure of the nation. In such difficult situations, the government failed to meet adequate funds for wage distribution. As

Formal Report Essay Example | Topics and Well Written Essays - 1250 words

Formal Report - Essay Example In purchasing equipments like laptops and desktops, it is feasible and good to pick leasing, as it is cost effective. It is good to examine the management of information and technology process of an agency, determine the business needs of the institution concerning information technology and acquit an analysis based on the benefit of cost choice of leasing and purchasing, in the decision whether to purchase or lease equipments. If the decision is made in the correct way and for a good reason, it is effective in terms of cost and efficient to lease than purchasing equipments. It can be harder to manage and expensive to lease than an instant purchase of equipments, if the decisions are handled in the wrong way. Introduction Present value It is hard to compare the same amount of cost between the option of purchasing and leasing in the concept of present value. The cost of the future currency in today’s value of the currency is what referred to as the present value. Money availabl e for future worth less at this time than the money you can use at that particular time. The future money one should use in leasing or purchasing is be converted to the current price to equate the actual cost of each one, when equating the alternative of leasing and purchasing. Information Technology Acquisition The first option of getting information technology in companies and institutions is by the outright purchase, which is gotten through the fund or revenue of any agency. This can only happen if restrictions are applied on the funds. Capital leasing is the second option, which is an accord that spreads the payment terms of equipments. After payment, the person who has bought the equipment, obtains a title to the equipment, but still he has been able to get access of the equipments. The buyer is able to spread the payment of the equipments in a given time to reduce the financial burden due to its acquisition. In an operating lease, one does not get ownership of the equipments. The seller retains ownership of the equipments and the person who has leased the equipments uses the technology for a given period (Taylor, 2003). Management issues The budget of information and technology has changed in all sectors, due to the fast development of information systems. This drastic change has led to the evaluation of the management issues of information technology. To control and understand the environment based on computers, full ownership cost and asset management, is required. Asset management binds the whole information technology ownership. It provides the environment control of computers to allow the director to purchase information technology equipments and price for the maximum cost efficiency. Lease terms should not be over 75 percent of the equipment. If the institution wishes to buy an item after a leasing period, the organization must pay the required price. The value at the starting point of the lease is not equal or greater than 90 percent. At the end o f the lease, the lease cannot give the buyer the ownership of the