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Applies the lesson to analyse a real world issue - Assignment Example

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This stems from perceived differences in arguments of a similar issue. The economic stagnation that crippled the world stretching from…
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Applies the lesson to analyse a real world issue
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Applies the lesson to analyse a real world issue

Download file to see previous pages... This phenomenon is not unique as during the Great Depression in 1930’s the world economy underwent a similar occurrence.
According to Hazlitt (1946), there is a difference between economists; good economists and bad economists. The bad economists observe the direct impacts of proposed course, whereas the good one focuses on long and indirect consequence. Teiying economic to long term predictions is the foundations of a good economist and as Brux, (2005) predicted long term economic eventualities such as poverty marks such characteristics.  This argument cannot be further from the truth. Economists have always been grouped into different groups, but the world’s most prominent group is the Keynesian school of thought. Other economic schools of thoughts that have dominated academic thoughts throughout the 20th century and even the 21st century are the monetarist school of thought and the Harvard economic school of thought.
According to the Keynesian school of thought, private capital investment decreased as a result of more capacity and the deficiency in good investment opportunities (Hetzel, 2012).  In fact, the concept of Secular Stagnation, a term coined by the Keynesian school of economics and it attributed the recession to inadequate capital investment hindering full employment of labour and other economic resources. Aptly referred to as the secular stagnation theory as articulated by the Keynesian school of economics, is a marketed different from the notion propagated by the monetarist school of economics.
According to the monetarist theorists the recession was as a result of the tendency of the rate of profit to decrease, and as such businesses will block investments in manufacturing plants with a decreasing rate of return. Theorists have provided different arguments on the phenomenon of low economic growth, and especially that regards the same that was realized in the industrialized ...Download file to see next pagesRead More
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