Fiscal And Monetary Policies Capital Formation And Economic Activity

Study of problems of fiscal policy and the role thereof in the financing of economic development, with particular reference to developing countries - covers concepts of economic growth, economic administration, budget structures, taxation and the effects of tax income, monetary policy, investment in private enterprise, foreign economic aid, etc. References and statistical tables.

The links between economic policy and economic growth are occasionally obvious but often obscure, with many factors interacting to influence the overall process. The list of parameters affecting economic growth of interest to scholars and policymakers is lengthy and expanding. Although the importance of government policy is widely recognized, the effects of policy on economic growth, in terms of direction and of magnitude, are difficult to measure. In Economic Policy, Financial Markets, and Economic Growth, a group of distinguished scholars offers findings on this ongoing and crucial debate that will be of interest to both academic and policy audiences.

Document from the year 2013 in the subject Politics - Miscellaneous, St. Lawrence University (SCHOOL OF POSTGRADUATE STUDIES), language: English, abstract: The basic nature of any economy lies in the scarcity of its productive resources in relation to its want. Our wants are ever increasing and recurring while availability of resources for satisfying them lags behind. An economy is constantly engaged in the solution of this eternal problem of scarcity. It therefore, undertakes various activities where by the available supply of resources is augmented, existing supplies are utilized more effectively, and some additional objectives like stability, growth, and distribution etc are met with as fully as possible. The division of economic activities between public and private sectors of the economy should not be a haphazard one, but should be based upon relevant economic and socio-political objectives and within the constraints of the country’s institutional framework. Accordingly, in a capitalist economy the main task of providing goods and services is assigned to the private sector in which individual economic units are motivated by economic rationality and guided by the market mechanism in their decision making. The owners of factors of production are guided by the income which they earn in alternative employments, the investors are guided by the profitability of alternative investments; the consumers try to maximize their consumer surplus and so on. In a pure market economy, virtually all goods and services are supplied by the private firms for profit and all exchanges of goods and services takes place through markets, with prices determined by free interplay of supply and demand. Individuals would be able to purchase goods and services freely, according to their tastes and economic capacity( their income and wealth), given market determined prices.

In this work James Tobin discusses two major issues of macroeconomics: the strength of automatic market forces in maintaining full employment equilibrium and the efficacy of government fiscal and monetary policies in stabilizing the economy.