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Macroeconomics is traditionally divided into topics along different time frames: the analysis of short-term fluctuations over the business cycle, the determination of structural levels of variables like inflation and unemployment in the medium (i.e. unaffected by short-term deviations) term, and the study of long-term economic growth.
Most business cycle theories focused on a single factor, [9] such as monetary policy or the impact of weather on the largely agricultural economies of the time. [8] Although business cycle theory was well established by the 1920s, work by theorists such as Dennis Robertson and Ralph Hawtrey had little impact on public policy. [11]
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
Technology shocks are sudden changes in technology that significantly affect economic, social, political or other outcomes. [1] In economics, the term technology shock usually refers to events in a macroeconomic model, that change the production function. Usually this is modeled with an aggregate production function that has a scaling factor.
Managerial economics aims to provide the tools and techniques to make informed decisions to maximize the profits and minimize the losses of a firm. [4] Managerial economics has use in many different business applications, although the most common focus areas are related to the risk, pricing, production and capital decisions a manager makes. [31]
Lucas' model was superseded as the standard model of New Classical Macroeconomics by the Real Business Cycle Theory, proposed in 1982 by Finn Kydland (1943–) and Edward C. Prescott (1940–), which seeks to explain observed fluctuations in output and employment in terms of real variables such as changes in technology and tastes. Assuming ...
While still building on traditional models such as the Ricardian framework, the mid 1900s bring forth innovation in international trade theory with the introduction of the Heckscher-Ohlin (H-O) model, developed by Swedish economists Eli Heckscher and Bertil Ohlin from the Stockholm School of Economics.
The digital economy is a portmanteau of digital computing and economy, and is an umbrella term that describes how traditional brick-and-mortar economic activities (production, distribution, trade) are being transformed by the Internet and World Wide Web technologies.