J M Keynes's Main Argument in the General Theory is Not Expressed in Terms of His Aggregate Demand (D) and Aggregate Supply (Z) Model. Keynes's D-Z Analysis Supports a Specific Y=C I, Marginal Propensity to Consume, Income Expenditure, Investment Multiplier Result (I=S) that Keynes Combined with His Liquidity Preference Function (L=M) to Determine the Rate of Interest in His IS-LP (LM) Model

2017 ◽  
Author(s):  
Michael Emmett Brady
Keyword(s):  
General Theory ◽  
Aggregate Demand ◽  
Preference Function ◽  
Main Argument ◽  
Aggregate Supply ◽  
Marginal Propensity To Consume ◽  
Marginal Propensity ◽  
Investment Multiplier

Effects of zero rating value added tax on government revenue in Namibia

2015 ◽  
Vol 6 (4) ◽  
pp. 343-355 ◽  
Author(s):  
Ojijo Odhiambo ◽  
John E. Odada
Keyword(s):  
Aggregate Demand ◽  
National Income ◽  
Value Added ◽  
Disposable Income ◽  
Government Revenue ◽  
Content Type ◽  
Goods And Services ◽  
Marginal Propensity To Consume ◽  
Long Run ◽  
Marginal Propensity

Purpose – The Government of Namibia has traditionally used fiscal (especially tax) policy as an instrument for annual budget formulation. Marginal tax rates for profits and various income brackets have been changed back and forth in response to changes in economic conditions. However, to date, no attempt has been made to evaluate the effectiveness of these reforms in achieving the broad national economic goals, in general, and the potential effects on government revenue in the short, medium and long-run periods, in particular. The purpose of this paper is to fill this information gap by analysing the implication of the 2008 zero-rating of value added tax (VAT) on basic commodities for aggregate demand and government revenue. Design/methodology/approach – The study uses an analytical framework based on economic theory which posits that in an open economy, which trades with the rest of the world, aggregate demand for goods and services is made up of consumption demand, investment demand, government demand and net exports and that real sector equilibrium is attained when aggregate supply of goods and services is equal to aggregate demand for goods and services. Findings – Using the Namibia Household Income and Expenditure Survey results, the annual loss in government revenue attributable to this policy is, ceteris paribus, estimated to be N$310.4 million. With a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services is likely to increase by N$276.3 million per annum. In the medium-to-long-run, national income will have increased by N$303.9 million per annum. Taxes which are responsive to changes in the level of national income will have increased by N$85.7 million, compensating for just over one quarter of the estimated loss in government revenue of N$310.4 million. Research limitations/implications – The study has used a partial equilibrium model as opposed to computable general equilibrium model, which provides a consistent framework that meets most of the sectoral and institutional data requirements for the simple reason that a social accounting matrix which can be used readily to connect data from different sources, such as national accounts and household surveys and would thus have been ideal model for analysing the impacts of the VAT tax reform has not been developed for Namibia. Practical implications – The paper provides a number of practical policy options available for government including, but not limited to, increasing direct taxes, VAT rate on specific (luxury) goods and services and statutory VAT rate on all other commodities not zero-rated, other taxes such as taxes; and borrowing from external sources. Social implications – It is established that zero-rating VAT on all the basic commodities in 2008 reduces the VAT paid by all Namibian households by N$310.4 million per year, which represents the annual increase in the disposable income of all households. And with a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services will increase by N$276.3 million per year. Originality/value – This paper presents the first attempt at evaluating the effectiveness of tax (VAT) policy reforms in Namibia in achieving the broad national economic goals, in general, and the potential effects on government revenue in the short, medium and long-run periods, in particular.

Aggregate Demand, Vertical Specialization and Growth Accounting

2016 ◽  
Vol 07 (03) ◽  
pp. 1650016
Author(s):  
Hubert Escaith
Keyword(s):  
Income Elasticity ◽  
Developing Economies ◽  
Supply And Demand ◽  
Aggregate Demand ◽  
International Perspective ◽  
Growth Accounting ◽  
Marginal Propensity To Consume ◽  
Marginal Propensity ◽  
Global Economic Governance

Global manufacturing and international supply chains have changed the way trade and economic growth are understood today. Recent statistical advances suggest new ways of looking at growth accounting when global value chains (GVCs) — articulating supply and demand chains from an international perspective — are taken into consideration. The method is applied to the G-20 countries, a group of leading developed and developing economies that took a prominent role in fostering and managing global economic governance. The demand dynamics is first analyzed through a growth-accounting decomposition, then through the long term determinants of income elasticity of imports and the household marginal propensity to consume imported products.

scholarly journals SUBSIDIOS Y CONSUMO DENTRO LA ECONOMÍA BOLIVIANA

2020 ◽  
Vol 13 (21) ◽  
pp. 52
Author(s):  
Sazcha Marcelo Olivera-Villarroel ◽  
Maira Calderón Calderón
Keyword(s):  
Aggregate Demand ◽  
Moral Economy ◽  
Dynamic Effect ◽  
Lower Income ◽  
Monthly Income ◽  
Medium Term ◽  
Marginal Propensity To Consume ◽  
Marginal Propensity ◽  
Policies And Programs ◽  
The Impact

El estudio analiza los efectos de la aplicación de políticas y programas de dotación de subsidios en Bolivia. Teniéndose como objetivo central distinguir el impacto de estas políticas en el aumento de la demanda agregada de la economía y el incremento del consumo y/o inversión. Partiendo del cálculo aproximado de la propensión marginal a consumir – PMC- de la economía por tipo de consumidor y así obtener el multiplicador de la demanda.La implementación de estas políticas ha generado un incremento en los ingresos mensuales de las poblaciones beneficiarias correspondiente a los quintiles inferiores de ingreso. Si bien mejora sus condiciones de vida, modifica su consumo al corto y mediano plazo; por lo que el efecto dinámico del multiplicador es menor sobre la demanda agregada del país y en consecuencia en el PIB nacional. En tanto un subsidio no monetario, podría generar un movimiento económico regional.Palabras clave: Bienestar económico, Economía Moral, multiplicador de la demanda, propensión a consumir, subsidios. AbstractThe study analyzes the effects of the application of subsidy policies and programs in Bolivia. Having as a central objective to distinguish the impact of these policies in the increase of the aggregate demand of the economy and the increase of consumption and / or investment. Starting from the approximate calculation of the marginal propensity to consume - PMC- of the economy by type of consumer and thus obtain the demand multiplier.The implementation of these policies has generated an increase in the monthly income of the beneficiary populations corresponding to the lower income quintiles. Although it improves their living conditions, it modifies its consumption in the short and medium term; so the dynamic effect of the multiplier is less on the aggregate demand of the country and consequently on the national PIB. As a non-monetary subsidy, it could generate a regional economic movement.Key words: Economic welfare, Moral Economy, demand multiplier, propensity to consume, subsidies.

scholarly journals Monetary Policy when Households have Debt: New Evidence on the Transmission Mechanism

2019 ◽  
Vol 87 (1) ◽  
pp. 102-129 ◽  
Author(s):  
James Cloyne ◽  
Clodomiro Ferreira ◽  
Paolo Surico
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Aggregate Demand ◽  
Balance Sheet ◽  
Household Survey ◽  
Housing Tenure ◽  
Balance Sheets ◽  
Marginal Propensity To Consume ◽  
Crucial Difference ◽  
Marginal Propensity

Abstract Using household survey data for the U.S. and the U.K., we show that the aggregate response of consumption to interest rate changes is driven by households with a mortgage. Outright home-owners do not adjust expenditure at all while renters change their spending but by less than mortgagors. Income rises for all households as interest rate cuts directly affect firm investment and household consumption, boosting aggregate demand. A crucial difference between the housing tenure groups is the composition of their balance sheets: mortgagors hold sizable illiquid assets but little liquid wealth. Our results reveal that general equilibrium effects on household income coupled with balance-sheet-driven heterogeneity in the marginal propensity to consume play a key role in the transmission of monetary policy.

ANALISIS TINGKAT KONSUMSI DAN ELASTISITAS PENDAPATAN TERHADAP PENGELUARAN PANGAN DAN NON PANGAN KARYAWAN PT SALONOK LADANG MAS

2020 ◽  
Vol 3 (1) ◽  
Author(s):  
Rio Cahya Perdana ◽  
Tirsa Neyatri Bandrang
Keyword(s):  
Marginal Propensity To Consume ◽  
Marginal Propensity

Pola konsumsi karyawan memiliki perbedaan pada tingkat jabatan dan pendapatan sehingga berpengaruh terhadan tingkat konsumsinya serta pola konsumsi dan pengeluaran konsumsi suatu rumah tangga pada karyawan serta berbeda pula persentase penggunaan pendapatan yang digunakan untuk konsumsi. Tujuan dari penelitian ini adalah untuk mengetahui pola konsumsi karyawan PT Salonok Ladang Mas, sehingga dapat dilihat perbedaan pola konsumsi pangan antara karyawan pimpinan dengan karyawan pelaksana, selanjutnya dapat diketahui besarnya perubahan konsumsi pangan akibat perubahan pendapatan. Metode penelitian yang digunakan adalah secara purposive dengan alasan keragaman pendapatan yang sangat bervariasi. Pengambilan sampel karyawan sebanyak 14 sampel untuk karyawan pimpinan dan 90 sampel untuk karyawan pelaksana. Dengan metode simple random sampling. Jumlah sampel ditentukan dengan Metode Slovin. Metode di analisis dengan metode analisis deskriptif, menghitung persen rata-rata pengeluaran konsumsi pangan, Marginal Propensity to Consume (MPC), dan Elastisitas pendapatan. Hasil penelitian diperoleh kesimpulan bahwa tidak terdapat perbedaan yang signifikan mengenai pola konsumsi hanya yang membedakan adalah jumlah bahan pangan yang dikonsumsi dan besarnya pengeluaran konsumsi. Pengeluaran konsumsi pangan karyawan pelaksana lebih tinggi di bandingkan karyawan pimpinan, ini menunjukkan tingkat kesejahteraan karyawan pimpinan lebih tinggi dibandingkan karyawan pelaksana. tingkat pendapatan terhadap jumlah pengeluaran konsumsi pangan adalah “ inelastis”.

Aggregate Supply, Aggregate Demand, and Inflation

2017 ◽  
pp. 417-453
Author(s):  
Sebastian Dullien ◽  
Neva Goodwin ◽  
Jonathan M. Harris ◽  
Julie A. Nelson ◽  
Brian Roach ◽  
...  
Keyword(s):  
Aggregate Demand ◽  
Aggregate Supply
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