COMPARE The Keynesian And Monetarist Business Cycle Theories

Both ideas are centered about changes in aggregate demand as the central cause of the business cycle. Keynesian’s use the idea of ‘pet spirits’ and the inability to forecast the future as the factor that leads to changes in investment. Monetarists assert that changes in the development rate of the quantity of money is the factor that leads to business cycles.

As for the modification following the preliminary shock of a change in the level of investment, both theories envision a multiplier effect. This impact causes a larger change in aggregate demand (and hence real GDP) than would happen strictly as a result of the initial change in real GDP. Both ideas also believe that sticky income limit the ability of the money wage rate to change to changes in aggregate demand.

11,000 million which is moderate in comparison with China or Brazil rather. Moreover, in 2013 this index slightly decreased. However, 2014 claim the renewal of bilateral agreements between Russia and India. For example, Defexpo India 2014 has reaffirmed the special relationship that exists between the defense industries of India and Russia, with a pavilion that houses exhibits of Russian companies being visited by top members of the Indian establishment. Generally, the defense connections between Russia and India are varied quite, with almost every defense contract providing for the creation of joint endeavors or licensed creation. 4.78 billion. Another industry which draws in India is computer-guided weaponry, made by the Russian Morinformsystem-Agat Concern.

In February both states also confirmed their plans to improve cooperation in nuclear energy, with the former backing the structure of more systems at the Kudankulam Nuclear Power Project (KNPP) and other parts of the united states. It isn’t really rational for the united states and the EU to antagonize and make an effort to isolate Russia.

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And there are several known reasons for this. Of all First, Russia is the biggest oil and gas manufacturer in the world and it simply means that imposing economic sanctions on Russia would tremble in the global energy market and, therefore, the whole global economy. Not to mention the EU’s dependency on Russian gas. Are the global economies prepared to witness a new crisis, simply because they are recovering from the latest financial crisis still? Second, Russia is investing massively in the US financial market, especially in Treasury bonds, and therefore, if Russia decides to withdraw its investments in response to Western sanctions, it could hit the US economy and cause a real financial meltdown.

Finally, over the last couple of years the Russian market is becoming one of the world’s largest markets for EU goods, services, and products, while the European union is buying Russia actively. In case of further worsening of relations between Russia and the West, the EU shall have a significant headache, searching for new markets and suffering lasting damage because of suspended joint contracts.