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Cyclical Deficit
Within the budgetary process, deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit, or budget deficit; the opposite of budget surplus. The term may be applied to the budget of a government, private company, or individual. Government deficit spending was first identified as a necessary economic tool by John Maynard Keynes in the wake of the Great Depression. It is a central point of controversy in economics, as discussed below. Controversy Government deficit spending is a central point of controversy in economics, with prominent economists holding differing views. The mainstream economics position is that deficit spending is desirable and necessary as part of countercyclical fiscal policy, but that there should not be a structural deficit (i.e., permanent deficit): The government should run deficits during recessions to compensate for the shortfall in aggregate demand, but should run surpluses in boom times ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Budgetary Policy
Budgetary policy refers to government attempts to run a budget in equity or in surplus. The aim is to reduce the public debt. It is not the same as a fiscal policy In economics and political science, fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variables ..., which deals with the fiscal stimulus to the economy, the repartition of taxes and the generosity of allowances. Government budgets {{econ-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Post-Keynesian
Post-Keynesian economics is a school of economic thought with its origins in ''The General Theory'' of John Maynard Keynes, with subsequent development influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor, Sidney Weintraub, Paul Davidson, Piero Sraffa and Jan Kregel. Historian Robert Skidelsky argues that the post-Keynesian school has remained closest to the spirit of Keynes' original work. It is a heterodox approach to economics. Introduction The term "post-Keynesian" was first used to refer to a distinct school of economic thought by Eichner and Kregel (1975) and by the establishment of the ''Journal of Post Keynesian Economics'' in 1978. Prior to 1975, and occasionally in more recent work, ''post-Keynesian'' could simply mean economics carried out after 1936, the date of Keynes's ''General Theory''. Post-Keynesian economists are united in maintaining that Keynes' theory is seriously misrepresented by the two other principal Keynesian schools: ne ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
European Monetary Union
The economic and monetary union (EMU) of the European Union is a group of policies aimed at converging the economies of member states of the European Union at three stages. There are three stages of the EMU, each of which consists of progressively closer economic integration. Only once a state participates in the third stage it is permitted to adopt the euro as its official currency. As such, the third stage is largely synonymous with the eurozone. The euro convergence criteria are the set of requirements that needs to be fulfilled in order for a country to be approved to participate in the third stage. An important element of this is participation for a minimum of two years in the European Exchange Rate Mechanism ("ERM II"), in which candidate currencies demonstrate economic convergence by maintaining limited deviation from their target rate against the euro. The EMU policies cover all European Union member states. All new EU member states must commit to participat ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stability And Growth Pact
The Stability and Growth Pact (SGP) is an agreement, among all of the 27 member states of the European Union, to facilitate and maintain the stability of the Economic and Monetary Union (EMU). Based primarily on Articles 121 and 126 of the Treaty on the Functioning of the European Union, it consists of fiscal monitoring of members by the European Commission and the Council of the European Union, and the issuing of a yearly recommendation for policy actions to ensure a full compliance with the SGP also in the medium-term. If a Member State breaches the SGP's outlined maximum limit for government deficit and debt, the surveillance and request for corrective action will intensify through the declaration of an Excessive Deficit Procedure (EDP); and if these corrective actions continue to remain absent after multiple warnings, the Member State can ultimately be issued economic sanctions. The pact was outlined by a resolution and two council regulations in July 1997. The first regulati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Balanced Budget Amendment
A balanced budget amendment is a constitutional rule requiring that a state cannot spend more than its income. It requires a balance between the projected receipts and expenditures of the government. Balanced-budget provisions have been added to the constitutions of Germany, Hong Kong, Italy, Poland, Slovenia, Spain and Switzerland, among others, as well as to the constitutions of most U.S. states. In the United States, the Republican Party has advocated for the introduction of a balanced budget amendment to the United States Constitution. Balanced budget amendments are defended with arguments that they reduce deficit spending and constrain politicians in making irresponsible short-term spending decisions when they are in office. Research shows that balanced budget amendments lead to greater fiscal discipline. However, there is substantial agreement among economists that ''strict annual'' balanced budget amendments have harmful near-term economic effects. In times of recessio ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chicago School Of Economics
The Chicago school of economics is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles. Milton Friedman and George Stigler are considered the leading scholars of the Chicago school. Chicago macroeconomic theory rejected Keynesianism in favor of monetarism until the mid-1970s, when it turned to new classical macroeconomics heavily based on the concept of rational expectations. The freshwater–saltwater distinction is largely antiquated today, as the two traditions have heavily incorporated ideas from each other. Specifically, new Keynesian economics was developed as a response to new classical economics, electing to incorporate the insight of rational expectations without giving up the traditional Keynesian focus on imperfect competition and sticky wages. Chicago economists have also left their intellectual influence in other fields, notably in pioneerin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Neoclassical Economics
Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good or service is determined through a hypothetical maximization of utility by income-constrained individuals and of profits by firms facing production costs and employing available information and factors of production. This approach has often been justified by appealing to rational choice theory, a theory that has come under considerable question in recent years. Neoclassical economics historically dominated macroeconomics and, together with Keynesian economics, formed the neoclassical synthesis which dominated mainstream economics as "neo-Keynesian economics" from the 1950s to the 1970s.Clark, B. (1998). ''Principles of political economy: A comparative approach''. Westport, Connecticut: Praeger. Nadeau, R. L. (2003). ''The Wealth of Na ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Balanced Budget
A balanced budget (particularly that of a government) is a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budget surplus exists (the accounts "balance"). More generally, it is a budget that has no budget deficit, but could possibly have a budget surplus. A ''cyclically'' balanced budget is a budget that is not necessarily balanced year-to-year, but is balanced over the economic cycle, running a surplus in boom years and running a deficit in lean years, with these offsetting over time. Balanced budgets and the associated topic of budget deficits are a contentious point within academic economics and within politics. Some economists argue that moving from a budget deficit to a balanced budget decreases interest rates, increases investment, shrinks trade deficits and helps the economy grow faster in the longer term. Other economists, especially those associated with Modern Monetary Theory (MMT), downplay the need for balanced budgets among c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
False Analogy
Argument from analogy or false analogy is a special type of inductive argument, whereby perceived similarities are used as a basis to infer some further similarity that has yet to be observed. Analogical reasoning is one of the most common methods by which human beings attempt to understand the world and make decisions. When a person has a bad experience with a product and decides not to buy anything further from the producer, this is often a case of analogical reasoning. It is also implicit in much of science; for instance, experiments on laboratory rats typically proceed on the basis that some physiological similarities between rats and humans entails some further similarity (e.g. possible reactions to a drug). Structure The process of analogical inference involves noting the shared properties of two or more things, and from this basis inferring that they also share some further property. The structure or form may be generalized like so: : P and Q are similar in respect t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
William Vickrey
William Spencer Vickrey (21 June 1914 – 11 October 1996) was a Canadian-American professor of economics and Nobel Laureate. Vickrey was awarded the 1996 Nobel Memorial Prize in Economic Sciences with James Mirrlees for their research into the economic theory of incentives under asymmetric information, becoming the only Nobel laureate born in British Columbia. The announcement of his Nobel Prize was made just three days prior to his death. Vickrey died while traveling to a conference of Georgist academics that he helped found and never missed once in 20 years. His Columbia University economics department colleague C. Lowell Harriss accepted the posthumous prize on his behalf. There are only three other cases where a Nobel Prize has been presented posthumously. Early years Vickrey was born in Victoria, British Columbia and attended high school at Phillips Academy in Andover, Massachusetts. After obtaining his B.S. in Mathematics at Yale University in 1935, he went on to comp ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Balances Mechanics
The Balances Mechanics (german: Saldenmechanik; from balances of bookkeeping respectively the credit system and mechanics to characterize the strict universal identities) is a work and mean of economics, comparable with Stock-Flow Consistent Modelling. Statements of Balances Mechanics are not based on assumptions and preconditions of a model but are of trivial arithmetic nature, usually shaped as equation and universal without restrictions. Balances Mechanics were developed by Wolfgang Stützel and published in his books ''Paradoxa der Geld- und Konkurrenzwirtschaft'' ''(Paradoxes of Competition-Based Monetary Economies)'' and ''Volkswirtschaftliche Saldenmechanik'' ''(Balances Mechanics of Economics)''. Overview Balances Mechanics deals with interrelations, the validity of which – contrary to most economics postulates – does not depend on assumptions about human behaviour. Balances Mechanics allows to put these frequently necessary assumptions of economic theories and postu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Wolfgang Stützel
Wolfgang Stützel (23 January 1925, in Aalen, Germany – 1 March 1987, in Saarbrücken, West Germany) was a German economist and professor of economics at the Saarland University, Germany. From 1966 to 1968 he was member of the German Council of Economic Experts (german: Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung). He coined the concept of '' Macroeconomic Mechanics of Balances'' (german: Volkswirtschaftliche Saldenmechanik). Among other things, balances mechanics enabled the theories of John Maynard Keynes in which he argued that government deficit spending can be necessary during a deflationary depression to be placed on a formal, structural arithmetic foundation based on accounting identities. Stützel used balances mechanics to explain how a deflationary depression results from aggregate planned revenues from sales of goods being greater than aggregate planned expenditures on purchasing goods. He also showed on the same basis how an inflati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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