This paper reconsiders the case for the use of fiscal policy based on a "functional finance" approach that advocates the use of fiscal policy to secure high levels of demand in the context of private aggregate demand, which would otherwise be too low. This "functional finance" view means that...

Recent developments in macroeconomic policy, in terms of both theory and practice, have elevated monetary policy while downgrading fiscal policy. Monetary policy has focused on the setting of interest rates as the key policy instrument, along with the adoption of inflation targets and the use of...

The anemic U.S. economic recovery and the threat of a double-dip recession stem from the weakness of investment, due to excess capacity created in the euphoric years of the "new economy" bubble. The current imbalances in the corporate sector (i.e., the all-time-high indebtedness in the face of...

The consumer has been on a tightrope since the bursting of the "new economy" bubble, as losses in equity markets have been partly offset by gains in real estate and fiscal support and mortgage refinancing have partly offset increased consumer cautiousness. The consumer will remain on a tightrope...

Romer (1993) suggests that universities should undertake experiments that would test the value of mandatory attendance for economics courses. He presents evidence showing that those who attended his classes received higher grades on his exams and concluded that “an important part of the...

Asia and the Eastern European nations are in a state of economic turmoil. An important element for improvement is that Western nations open their markets to more trade. This is in fact what the West could have done after the fall of the Berlin Wall. But petty shortsightedness of the governing...

Like industrial development, agricultural growth also requires a leading sub-sector to generate dynamism in production, capital formation and technology. A predominantly cash crop like potato has the potential to play such a leading role in rural development in North East India. In terms of...

This essay applies a historical-institution approach to assess the impact of WTO membership on China’s economic, legal and political institutions. In each case historical and institutional trends are described, and the effects of WTO membership on these trends are examined. The topics include...

What evidence exists on the value of formal planning for strategic decision-making in marketing? This paper reviews the evidence. This includes two tests of face validity. First, we use the market test: Are formal procedures used for marketing planning? Next, we examine expert prescriptions:...

The central purpose of this paper is to examine vertical integration as an equilibrium phenomenon. We model it as integration between Cournot oligopolists in both the upstream and the downstream stages. We consider the issue of private profitability versus collective profitability and show that...