• #0 (no title)
  • #0 (no title)
  • About
  • Facebook
  • Twitter
  • RSS
(As ISO 9001:2015 Certified Publications)
    • Quick Search
    • Advanced Search
  • Home
  • Editorial Policy
  • Author Guidelines
  • Submission
  • Copyright Form
  • Career
  • Contact us
  • Subscription

Back to Journal

Home»Articles»Constraints in Macroeconomic Policies in Raising Employment

Constraints in Macroeconomic Policies in Raising Employment

Author : MudaserAhad Bhat and Binish Qadri
Volume 7 No.1 January-June 2018 pp 1-9

Abstract

Macroeconomic factors such as low inflation, export orientation and low labor taxes help to determine how much employment is created by growth. The relationship between growth and employment is strong and positive which gets enlightened when all macroeconomic policies work in harmony. Indian economy at the time of independence was mainly rural in nature and in a bad state. This was due to the anti-Indian policies of the British Government. The country was engulfed by the vicious circle of poverty and to break this vicious circle Government of India planned in a focused way. The emphasis shifted from agriculture to industry. Also emphasis was laid on increasing role of the state to generate employment and reduce poverty by appropriate macroeconomic policies. However, little was achieved till 1990’s. So the path to long-run economic growth was ensured by introducing New Economic Policy in 1991, which aimed at reducing fiscal deficits, lowering inflation, maintaining exchange rate stability etc. One thing that was obvious was that under New Economic Policy, the public sector will have a diminished role and will be largely limited to social sectors and non-profit making activities unattractive to the private sector. These policy changes affected macroeconomic policies of the government. Despite these policy changes brought under the New Economic Policy, one feature that still remains an important feature of macroeconomic policies in India is that macroeconomic policies still continue to act more as the control devices rather than as development tools. As a result macroeconomic policies fail to generate additional employment. Macroeconomic policies need to be converted into tools for macroeconomic stabilization (Shah, 2008). There are various constraints in macroeconomic policies which refrain them to act as development tools and thereby increase unemployment levels in underdeveloped economies of the world. The present paper attempts to highlight such constraints and suggest remedial measures.

Keywords

Heterogeneity, formalism, overlapping, absence of equi-genetic change, accommodation with assimilation, stretching-the-existing function, leaving-the-one stretching function

Full Text:

References

[1] D. Hilbert., “Grundlagen der Geometrie”, (Foundation of Geometry), Springer, 1913.
[2] Harrod, Roy F., “An Essay in Dynamic Theory”, The Economic Journal. Vol. 49, No. 193, pp. 14–33, 1939.doi:10.2307/2225181.
[3] Domar, Evsey, “Capital Expansion, Rate of Growth, and Employment”, Econometrica, vol. 14, No. 2, pp. 137–147, 1946. doi: 10.2307/1905364.
[4] Muth, J.F., “Rational Expectations and the Theory of Price Movements”, Econometrica, vol. 29, No. 3, pp. 315-335, 1961. Retrieved from http://www.jstor.org/stable/1909635.
[5] Arrow, J. K., “Economic welfare and the allocation of resources for invention”, National Bureau of Economic, Research Princeton University Press. ISBN: 0-87014-304-2, pp. 609 – 626, 1962. Retrieved from http:// www. nber.org/chapters/c2144.pdf
[6] Sargent, Thomas J., and Neil Wallace., “Some Unpleasant Monetarist Arithmetic”, Federal Reserve Bank of Minneapolis Quarterly Review. Vol. 5, No. 1, pp. 1−17, 1981.
[7] Krasner, S.D., “Approaches to the State: Alternative Concepts and Historical Dynamics”, Comparative Politics, vol. 16, No. 2, pp. 223-46, 1984.
[8] Lucas, R.E., “On the mechanics of Economic Development”, Journal of Monetary Economics. Vol. 22 , No.1, 1988.
[9] World Bank, “World Development Report”, Washington D.C, 1988.
[10] Government of India, “Report on the Current Economic Situation and Priority Areas for Action, Ministry of Finance, New Delhi”, 1989.
[11] Blanchard, Olivier Jean; Fischer, Stanley, “The Overlapping Generations Model. Lectures on Macroeconomics”, Cambridge: MIT Press. pp. 91–152, 1989. ISBN 0-262-02283-4.
[12] Daly, Herman., “Elements of Environmental Macroeconomics.Chapter3in Costanza ed.Ecological”, Economics: The Science and Management of Sustainability. New York: Columbia University Press, 1991.
[13] Romer, P.M., “The Origins of Endogenous Growth”, The Journal of Economic Perspectives, Vol. 8, No. 1, pp. 3–22, 1994. Doi:10.1257/jep.8.1.3.
[14] Ramey, Garey, and Valerie A. Ramey, “Cross-Country Evidence on the Link between Volatility and Growth”, American Economic Review, Vol. 85 (December), pp. 1138–51, 1995.
[15] Bagchi, Amaresh, “India’s Fiscal Reform: Some Signposts”, Vol. 28, No. 1, 1998, January-March, Indian Institute of Management, Ahmedabad.
[16] Dow, S. C., “Editorial Introduction to the Formalism in Economics Controversy”, Economic Journal, Vol. 108, No. 451, 1998.
[17] Krusell P, Smith AA., “Income and wealth heterogeneity in the macro economy”, Journal of Political Economy, vol. 106, No. 5, pp. 867–96, 1998.
[18] Easterly, William, and Aart Kraay, , “Small States, Small Problems?” Policy Research Working Paper No. 2139, 1999, Development Research Group (Washington: World Bank).
[19] Ames,B.,Brown.W.,Devarajan,s.,&Izquierdo,A., “Macroeconomic Policy and Poverty Reduction.Washington,DC:International Monetary Fund”, 2001. Retrieved from https:// www.imf.org/external/pubs/ft/exrp/macropol/eng/#ref.
[20] Harris., “Macroeconomic Policy and Sustainability. Global Development And Environment Institute (G-DAE)”, 2001.Working Paper No. 01-09.Retrieved fromhttps://ageconsearch.umn.edu/bitstream/15573/1/wp010009.pdf.
[21] Mayer, Thomas, “Monetary policy: role of”. In Snow don, Brian; Vane, Howard R. An Encyclopedia of Macroeconomics”, Northampton, Massachusetts: Edward Elgar Publishing. pp. 495–99, 2002. ISBN 978-1-84542-180-9.Retrieved from http:// www. Review econ.com/outside-resources.html.
[22] Greif, A., “Institutions. Theory and History”, Forthcoming Cambridge University Press. Chapter 1, 5 and 9.Gokarn, 2003. Keynote Address. The Private Equity International India Forum.
[23] M. Arellano., “Panel Data Econometrics. Chapter 2. Unobserved heterogeneity”, pp. 7-31, 2003. Oxford University Press.
[24] Barro Robert J & Sala-i-Martin, Xavier, “Overlapping Generations Model”, Economic Growth (Second ed.). New York: McGraw-Hill. pp. 190–200, 2004. ISBN 0-262-02553-1.
[25] Chakravarty, Shomit, “Reform of Tax Administration in India _ A Quiet Revolution”, in ADB India Economic Bulletin, October, New Delhi, 2004.
[26] Florensa, C. M., “Institutional Stability and Change. A Logic Sequence for Studying Institutional Dynamics”, Presented at Tenth Biennial Conference of the International Association for the Study of Common Property (IASCP). “The Commons in an Age of GlobalTransition: Challenges, Risks and Opportunities”. Oaxaca, México, 9-13 August, 2004.
[27] Jha, R., “Innovative sources of development finance”, The World Economy. Vol. 27, No. 2, pp. 193-214, 2004.
[28] Downes, P & Stoeckel, A., “Drivers of structural change in the Australian Economy”. Centre for International Economics Canberra & Sydney, 2006. Retrieved from http://www.thecie.com.au/wp-content/uploads/2014/06/MASTER-DITR-26-Feb.pdf.
[29] Spiegel, S., “Macroeconomic and Growth Policies”, New York, 2006.UnitedNations DESA/UNDP.Retrievedfromhttps://www.g24.org/wpcontent/uploads/2016/01/MACROECONOMIC-and-growth-policies.pdf.
[30] Biggeri, M., “Children’s valued capabilities”, In M. Walker & E. Unterhalter (Eds.), Amartya Sen’s capability approach and social justice in education, Chapter 10 , pp. 197–214, 2007. New York: Palgrave.
[31] Chari, V.V. & Kehoe, J.P., “The Heterogeneous State of Modern Macroeconomics: A Reply to Solow”, Federal Reserve Bank of Minneapolis Research Department Staff Report 399, 2007. Retrieved from https://www.minneapolisfed.org/research/sr/sr399.pdf.
[32] Algan, Y., O. Allais & W. J. Den Haan, “Solving Heterogeneous-Agent Models with Parameterized Cross-Sectional Distributions”, Journal of Economic Dynamics and Control, vol. 32, pp. 875 -908, 2008.
[33] Goodwin, N., Nelson, A.J., &Harris, M.J. “Macroeconomic Activity in Context. First edition. Global Development and Environment Institute Tufts University Medford”, MA 02155, 2008. M.E.Sharpe.Retrievedfromhttp://www.ase.tufts.edu/gdae/education_materials/modules/Macroeconomic_Activity_in_Context.pdf.
[34] Shah, A., “New issues in Indian macro policy”, Working Paper 2008-51, 2008. Retrieved from citeseerx.ist.psu.edu/ viewdoc/ download?doi=10.1.1.380.1832&rep=rep1&type=pdf.
[35] Reiter, M., “Solving Heterogeneous-Agent Models by Projection and Perturbation”, Journal of Economic Dynamics and Control, Vol. 33, pp. 649 – 665, 2009.
[36] Price, R., “The Political Economy of Fiscal Consolidation”, OECD Economics Department Working Papers, No. 776, 2010, OECD Publishing, Paris. http:// dx. doi. org/ 10.1787/5kmddq798lls-en
[37] Joya, O., “Macroeconoimc Instabilty in Afghanistan: Causes and Solutions”, Masters dissertation (memoire), 2011.
[38] Nayyar, D., “Rethinking macroeconomic policies for development”, Brazilian Journal of Political Economy. Vol. 31, No. 3 (123), pp. 339-351, 2011.
[39] Mertens, T. M. and K. L. Judd, “Equilibrium existence and approximation for incomplete market models with substantial heterogeneity”, Working Paper, 2012.
[40] Hill, L. Version 1. Factionalism. ANTH 423, Dr. Maximilian Forte, Dept. of Sociology & Anthropology, Concordia University, 2013. Retrieved from https:/ /political anthro. Word press.com/factionalism/
[41] Junankar, N.P., “Is there Trade-off between Employment and Productivity?”, IZA Discussion Paper No. 7717, 2013.
[42] Aziz, J., “What Are Structural Reforms?”, 2013. Retrieved from http://www.pieria. co.uk/articles/what_are_structural_reforms.
[43] Krueger, D., K. Mitman and F. Perri, “On the Distribution of the Welfare Losses of Large Recessions”, Proceedings of the Econometric Society World Congress, 2016.
[44] Ghose, K.A., “Globalization, Growth and Employment in India”, Indian Journal of Human Development. Vol. 10, No. 2, pp. 127-156, 2017.
[45] Stefano Eusepi&Bruce Preston, “Stabilizing Expectations under Monetary and Fiscal Policy Coordination”, Federal Reserve Bank of New York Staff Reports. Staff Report No. 343, September 2008.

Asian Review of Social Sciences (ARSS) is a quarterly international peer-reviewed journal of Social Sciences. One of the objectives of this journal is to disseminate knowledge on various research issues connected with the topics include, but are not limited to:

Anthropology
Archaeology
Business Administration
Communication
Criminology
Economics
Education
Government

Linguistics
International Relations
Political Science
Sociology
Geography
History
Law
Psychology

Macroeconomic factors such as low inflation, export orientation and low labor taxes help to determine how much employment is created by growth. The relationship between growth and employment is strong and positive which gets enlightened when all macroeconomic policies work in harmony. Indian economy at the time of independence was mainly rural in nature and in a bad state. This was due to the anti-Indian policies of the British Government. The country was engulfed by the vicious circle of poverty and to break this vicious circle Government of India planned in a focused way. The emphasis shifted from agriculture to industry. Also emphasis was laid on increasing role of the state to generate employment and reduce poverty by appropriate macroeconomic policies. However, little was achieved till 1990’s. So the path to long-run economic growth was ensured by introducing New Economic Policy in 1991, which aimed at reducing fiscal deficits, lowering inflation, maintaining exchange rate stability etc. One thing that was obvious was that under New Economic Policy, the public sector will have a diminished role and will be largely limited to social sectors and non-profit making activities unattractive to the private sector. These policy changes affected macroeconomic policies of the government. Despite these policy changes brought under the New Economic Policy, one feature that still remains an important feature of macroeconomic policies in India is that macroeconomic policies still continue to act more as the control devices rather than as development tools. As a result macroeconomic policies fail to generate additional employment. Macroeconomic policies need to be converted into tools for macroeconomic stabilization (Shah, 2008). There are various constraints in macroeconomic policies which refrain them to act as development tools and thereby increase unemployment levels in underdeveloped economies of the world. The present paper attempts to highlight such constraints and suggest remedial measures.

Editor-in-Chief
Dr. Lakshmi Narayanan
Department of Social Sciences, College of Arts and Applied Sciences, Dhofar University, Oman
[email protected]
Editorial Advisory Board
Dr. Mashitah Binti Hamidi
Department of Social Administration and Justice, University of Malaya, Malaysia
[email protected]
Dr. Jillian Ooi Lean Sim
Department of Geography, University of Malaya, Malaysia
[email protected]
Dr. Haris Bin Abd Wahab
Department of Social Administration and Justice, University of Malaya, Malaysia
[email protected]
Dr. Mohana Dass Ramasamy
Department of Indian Studies, University of Malaya, Malaysia
[email protected]
Dr. Ma Tin Cho Mar @ Noorjahan Bi Bi
Department of South East Asian Studies, University of Malaya, Malaysia
[email protected]
Dr. Asbah Binti Razali
Department of Anthropology and Sociology, University of Malaya, Malaysia
[email protected]
Dr. Azharudin Bin Mohamed Dali
Department of History, University of Malaya, Malaysia
[email protected]
Dr. Hasmah Binti Zanuddin
Department of Media Studies, University of Malaya, Malaysia
[email protected]

2016

2015

2014

  • Results
  • Asian Review of Mechanical Engineering (ARME)
  • career

2013

  • Home
  • Shop
  • My Account
  • Logout
  • Contact us
  • The Asian Review of Civil Engineering (TARCE)

2012

  • Asian Journal of Electrical Sciences(AJES)
  • Asian Journal of Computer Science and Technology (AJCST)
  • Asian Journal of Information Science and Technology (AJIST)
  • Asian Journal of Engineering and Applied Technology (AJEAT)
  • Asian Journal of Science and Applied Technology (AJSAT)
  • Asian Journal of Managerial Science (AJMS)
  • Asian Review of Social Sciences (ARSS)

2011

2010

    Table of Contents

    Editorial Note

    Editorial Dr. Lakshmi Narayanan

    Editor-in-Chief
    Dr. Lakshmi Narayanan
    Department of Social Sciences, College of Arts and Applied Sciences, Dhofar University, Oman
    [email protected]
    Editorial Advisory Board
    Dr. Mashitah Binti Hamidi
    Department of Social Administration and Justice, University of Malaya, Malaysia
    [email protected]
    Dr. Jillian Ooi Lean Sim
    Department of Geography, University of Malaya, Malaysia
    [email protected]
    Dr. Haris Bin Abd Wahab
    Department of Social Administration and Justice, University of Malaya, Malaysia
    [email protected]
    Dr. Mohana Dass Ramasamy
    Department of Indian Studies, University of Malaya, Malaysia
    [email protected]
    Dr. Ma Tin Cho Mar @ Noorjahan Bi Bi
    Department of South East Asian Studies, University of Malaya, Malaysia
    [email protected]
    Dr. Asbah Binti Razali
    Department of Anthropology and Sociology, University of Malaya, Malaysia
    [email protected]
    Dr. Azharudin Bin Mohamed Dali
    Department of History, University of Malaya, Malaysia
    [email protected]
    Dr. Hasmah Binti Zanuddin
    Department of Media Studies, University of Malaya, Malaysia
    [email protected]

    Articles

Advanced Search

You can submit your research paper to the journal in just a few clicks. Please follow the steps outlined below: 1. Register your details and select to be an Author 2. Log in with your user name and password 3. ‘Start a new submission’ and follow these 5 steps:

[gravityform id="1" name="Registration" title="false" description="false"]

Privacy Statement

The names and email addresses entered in this journal site will be used exclusively for the stated purposes of this journal and will not be made available for any other purpose or to any other party.

Privacy Statement

The names and email addresses entered in this journal site will be used exclusively for the stated purposes of this journal and will not be made available for any other purpose or to any other party.

Lorem1 ipsum dolor sit amet, consectetur adipiscing elit. Nulla convallis ultricies scelerisque. Fusce dolor augue, sollicitudin eget lacus vitae, rutrum commodo lacus. Praesent ullamcorper facilisis dui. Sed suscipit id lorem ut dapibus. Integer dictum cursus nisl, quis ullamcorper augue. Sed non rutrum mauris. Maecenas in dolor est. Donec eget sagittis mi. Sed non leo eu odio mollis pulvinar vitae et leo. Integer eu feugiat tortor. Duis massa purus, eleifend id erat eget, hendrerit semper risus. Suspendisse cursus varius dapibus

Lorem1 ipsum dolor sit amet, consectetur adipiscing elit. Nulla convallis ultricies scelerisque. Fusce dolor augue, sollicitudin eget lacus vitae, rutrum commodo lacus. Praesent ullamcorper facilisis dui. Sed suscipit id lorem ut dapibus. Integer dictum cursus nisl, quis ullamcorper augue.

Subscription

Subscription (for 12 issues):
Rs. 5000; Overseas - USD 500;
Cheque drawn in favour of "Informatics Publishing Limited"
Click here to download online subscription form

Download

DD Mailing Address

Lorem1 ipsum dolor sit amet,
Lorem1 ipsum dolor sit amet,
Lorem1 ipsum dolor sit amet.

BACK TO TOP

Outstanding Scholars

The Journals honor Outstanding Scholars in various fields. Scholar of the Month should have contributed to their field and to the larger community. Recipients will be nominated by the Advisory Board and approved by the Editor-in-Chief of the allied journals published by The Research Publication. Scholar of the Month will be displayed in the web portal of the concerned journal.

Please send your brief write up to [email protected]

Editors and Reviewers

The Research Publication is seeking qualified researchers to join its editorial team as Associate Editor, Editorial Advisory Board Member, and Reviewers.
Kindly send your details to [email protected]

Call For Papers

Authors are requested to submit their papers electronically to [email protected] with mentioning the journal title.

Mailing Address

The Research Publication 1/611, Maruthi Nagar, Rakkipalayam Post, Coimbatore – 641 031, Tamil Nadu, India Phone No.: 0422 2461001

  • About
  • Editorial Policy
  • Author Guidelines
  • Contact us
  • Copyright
  • Facebook
  • Twitter
  • RSS

© 2015 The Research Publication. All rights reserved.

The Research Publication
  • Home
  • Editorial Policy
  • Author Guidelines
  • Submission
  • Copyright Form
  • Career
  • Contact us
  • Subscription