How to build an economy free of recession and stagnation: results from a multi-commodity macro model
Aggregate macro models used in existing studies have insufficient details to shed any light on the market saturation phenomenon and thus have failed to uncover the fundamental cause of economic recessions. A multi-commodity macroeconomic model is constructed reflecting three simple but revolutionary...
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| Format: | Article |
| Language: | English |
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General Association of Economists from Romania
2018-06-01
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| Series: | Theoretical and Applied Economics |
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| Online Access: |
http://store.ectap.ro/articole/1331.pdf
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| Summary: | Aggregate macro models used in existing studies have insufficient details to shed any
light on the market saturation phenomenon and thus have failed to uncover the fundamental cause
of economic recessions. A multi-commodity macroeconomic model is constructed reflecting three
simple but revolutionary axioms, which summarize the important but often overlooked facts in an
economy. The results from the model shows that, without product innovation, the economy will
reach a consumption/income ceiling so that recessions are inevitable. In order to build an
economy free of recession, the paper calls for stimulating innovation through a thorough revision
of the current patent laws. |
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| ISSN: | 1841-8678 1844-0029 |