Norwegian economist Ragnar Anton Kittil Frisch is known as one of the founders of modern economics. Not only did he coin the term "macro economics," but he also invented modern econometrics, working on a time series in the'20s and linear regression analysis in the'30s. Some of his principles are used in business cycle theories and he's credited with making important contributions to microeconomics' production theory. Today his work is found in economics books and university classrooms around the world, where students learn to test different theoretical economic situations with math and statistics.
It's a common misconception that economic statistics and econometrics are exactly the same thing. The difference is that statistics are performed in controlled experiments with known data sets, whereas econometrics deals with data as is or data that is subjected to hypothetical possibilities too. Regression analysis is often used in this technique, which determines the mean of random variables is predicted based on the mean of previously measured variables. Other tools used include time-series analysis (measuring variables over a period of time) and cross-sectional analysis (studying the correlation between two variables at a certain point in time).
One problem with econometrics is that, occasionally, the integrity of the results is called into question, since it is so easy to manipulate statistics to achieve a desired conclusion. As a result, most economists will submit their work to multiple peer reviews before publishing their findings to improve the validity of the studies. Despite its critics, this study of applied economics is far more useful in predictions than random guesses. Whether it pertains to stock markets or budget planning, this forecasting method is a valuable tool.
An economic recession is ugly. Consumers lose their jobs, lose their homes, file for bankruptcy and tighten spending. Businesses shed jobs, cut wages, lay-off employees and collapse. Lending institutions have trouble collecting from debtors and this dries up their liquid assets. Investors see drops in profits and nervously pull their money out. As a result, our Gross Domestic Product declines and our nation as a whole becomes poorer. Is there no end in sight for our current despair? Global economics experts have a thing or two to say about the current crisis.
According to "macro economics" professors Antonio Fatas and Ilian Mihov at the INSEAD International Business School, there were some "classic macroeconomic imbalances that predicted the crisis." They argue the best way to avoid an economic recession is to have a stable pattern of consumption that matches national GDP, as we see in countries like Germany and France. In the US, the GDP went up 1% in the first quarter of 2008, which is extremely low, and then retracted 0.5% in the third quarter, which is the worst decline since 2001. When advanced economies build insurmountable deficits and their Gross Domestic Products decline, you can be rest assured a recession is on its way.
We've seen a combination of economic theories come together to try digging out of this economic recession. So far, the government has spent money on propping up our financial institutions that were "too big to fail," invested in infrastructure and energy, reduced interest rates, cut taxes and put money back into consumers' pockets to give the economy a jolt. We turn now to lessons in economics to learn what we can do to prevent further collapse and get back on-track and restore our status as a global economics super power.
There are different economics books and schools of thought regarding how to dig out of an economic recession. Mainstream followers of basic economics say we must simply create more consumer demand and stimulate spending again, which has been the policy carried by the Bush and Obama administrations so far. Monetary experts favor decreasing interest rates, discounting federal bonds and opening up loan access to more people and small businesses. Keynesian economists, on the other hand, prefer to raise interest rates, tighten overall government spending but increase investments in infrastructure, while also encouraging businesses to decrease wages (faster than the prices are falling). One could argue that the current stimulus packages have also made use of these theories. Supply-side economists may advocate tax cuts to promote business investments, while laissez-faire minded economists say the situation will work itself out naturally, without government interference.
If you are looking for business checks, you will want to use the best quality at the lowest price.
It's a common misconception that economic statistics and econometrics are exactly the same thing. The difference is that statistics are performed in controlled experiments with known data sets, whereas econometrics deals with data as is or data that is subjected to hypothetical possibilities too. Regression analysis is often used in this technique, which determines the mean of random variables is predicted based on the mean of previously measured variables. Other tools used include time-series analysis (measuring variables over a period of time) and cross-sectional analysis (studying the correlation between two variables at a certain point in time).
One problem with econometrics is that, occasionally, the integrity of the results is called into question, since it is so easy to manipulate statistics to achieve a desired conclusion. As a result, most economists will submit their work to multiple peer reviews before publishing their findings to improve the validity of the studies. Despite its critics, this study of applied economics is far more useful in predictions than random guesses. Whether it pertains to stock markets or budget planning, this forecasting method is a valuable tool.
An economic recession is ugly. Consumers lose their jobs, lose their homes, file for bankruptcy and tighten spending. Businesses shed jobs, cut wages, lay-off employees and collapse. Lending institutions have trouble collecting from debtors and this dries up their liquid assets. Investors see drops in profits and nervously pull their money out. As a result, our Gross Domestic Product declines and our nation as a whole becomes poorer. Is there no end in sight for our current despair? Global economics experts have a thing or two to say about the current crisis.
According to "macro economics" professors Antonio Fatas and Ilian Mihov at the INSEAD International Business School, there were some "classic macroeconomic imbalances that predicted the crisis." They argue the best way to avoid an economic recession is to have a stable pattern of consumption that matches national GDP, as we see in countries like Germany and France. In the US, the GDP went up 1% in the first quarter of 2008, which is extremely low, and then retracted 0.5% in the third quarter, which is the worst decline since 2001. When advanced economies build insurmountable deficits and their Gross Domestic Products decline, you can be rest assured a recession is on its way.
We've seen a combination of economic theories come together to try digging out of this economic recession. So far, the government has spent money on propping up our financial institutions that were "too big to fail," invested in infrastructure and energy, reduced interest rates, cut taxes and put money back into consumers' pockets to give the economy a jolt. We turn now to lessons in economics to learn what we can do to prevent further collapse and get back on-track and restore our status as a global economics super power.
There are different economics books and schools of thought regarding how to dig out of an economic recession. Mainstream followers of basic economics say we must simply create more consumer demand and stimulate spending again, which has been the policy carried by the Bush and Obama administrations so far. Monetary experts favor decreasing interest rates, discounting federal bonds and opening up loan access to more people and small businesses. Keynesian economists, on the other hand, prefer to raise interest rates, tighten overall government spending but increase investments in infrastructure, while also encouraging businesses to decrease wages (faster than the prices are falling). One could argue that the current stimulus packages have also made use of these theories. Supply-side economists may advocate tax cuts to promote business investments, while laissez-faire minded economists say the situation will work itself out naturally, without government interference.
If you are looking for business checks, you will want to use the best quality at the lowest price.
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