POPP2406 Week 4
- Created by: Elizbooks
- Created on: 09-05-22 16:13
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- POPP2406 Week 4
- Growth regimes
- Blyth (2014) - a group of organisations and rules that represent the bond between citizens, the state and markets and influences how growth occurs
- Creates opportunities within the market
- Regimes help address various economic crises and crises determine the next regime
- Historical: 1929 Wall Street Crash - Keynes growth regime, 1970 stagflation - neolib
- Doesn't last long and the forthcoming regime aims to fix the issue of the previous regime
- Liberal capitalism
- Encouraged by profit making opportunities and investment
- Aim to create trust in monetary currency
- ensure that money exchanges and currency is reliable and stable for people to use
- Low gov intervention
- Used gold to accumulate wealth
- Gold = currency
- But did not last long, money replaced gold as economic currency
- Criticism: Gold as currency is not reliable source for profits and restricts economic growth
- Relied on profits from international trade and finance for growth
- Criticism: Prioritised too much on investment to produce profit instead of production - which lead to economic crises such as the 2008 financial crash
- Blyth (2014) - a group of organisations and rules that represent the bond between citizens, the state and markets and influences how growth occurs
- Growth regimes
- Keynesian capitalism
- Trying to reduce unemployment and improve social security
- Aims to increase wages to tackle this problem
- Invested in industries such as manufacturing to create more jobs to help citizens
- Aims to increase wages to tackle this problem
- Involves lots of government intervention and regulatory bodies
- Invested more in public welfare institutions such as health and education which created more jobs and more investment and improved productivity levels
- Regulation increased for business financial activities e.g. imposed taxes
- Criticism: Business dividend and profits may lower due to wage growth and firms will increase prices of goods and services to ensure they make enough profit
- Inflation will decrease profitability levels
- Stagflation - inflation and unemployment high but economic growth low
- Trying to reduce unemployment and improve social security
- Keynesian capitalism
- Neoliberal capitalism
- Wanted to fix the problem with inflation
- Advocated for less government intervention due to stagflation crises from Keynesian growth regime
- Relied on profits from trading and finance
- Wanted de-regulated institutions and methods to create more choice and freedom for businesses and for private investment e.g. privatisation of state assets
- Reduced wages means less incomes and less spending power for consumers
- Reduce profits
- People are less likely to pay back loans from the bank which could lead to crises such as the 2008 GFC
- Growth regimes
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