» Macroeconomics
This flow-chart diagram illustrates how governments, households, corporations and international entities interact in 3 major markets to run the economy as a whole: workforce market, financial market and commodity market.
A typical industry life cycle might be described by four stages: a start-up stage, characterized by extremely rapid growth; a consolidation stage, characterized by growth that is less rapid but still faster than that of the general economy; a maturity state, characterized by growth no faster than the general economy; and a stage of relative decline in which, the industry grows less rapidly than the rest of the economy, or actually shrinks.
A common thread in the exchange rate-based stabilization experiences we have reviewed is a real currency appreciation accompanied by a growing deficit on current account. Only countries like Israel and Chile, which have avoided drastic real currency appreciation, have been able to reduce inflation without generating subsequent crisis and pressures for policy reversals. Thus, an understanding of why real appreciation occurs after the government targets the exchange rate is central to understanding why many stabilization efforts fail. There are three main theories explaining real appreciation. Read the rest of this entry »
While many of us surely don’t appreciate it from a personal perspective, unemployment is unavoidable in any economy. However, it is not necessarily harmful. In a healthy economy, a certain degree of unemployment indicated as a percentage reflects the fact that there constantly are job seekers and employers voluntarily running after better opportunities for their own good.
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