New Classical Economics: Principles, Rational Expectations, and Critiques
The New Classical Economics
The new classical economics emerged during the 1970s, a period of high inflation and unemployment, and growing dissatisfaction with Keynesian orthodoxy.
It critiques Keynesian theory, building upon monetarism. New classical economists argue that Keynesian models are flawed and advocate for a return to classical economics principles to construct robust macroeconomic models.
In the new classical view, systematic monetary and fiscal policies aimed at changing aggregate demand
Read MoreIncome Distribution and Inflation: A Socioeconomic Analysis
Income Distribution and Its Impact on Economic Welfare
A nation’s economic well-being is significantly influenced by its income levels. However, even with acceptable per capita income, a large portion of the population can still experience deprivation. Therefore, understanding income distribution is crucial.
Income Distribution Analysis
In less developed countries, wealth often concentrates among a few, leading to widespread poverty. While developed countries generally have a smaller percentage of
Read MoreThe Challenge of Finding a CEO in Brazil’s Evolving Market
The Challenge of Finding a CEO in Brazil
Finding a new CEO has become increasingly difficult for Brazilian companies due to growth and globalization. Over the past five years, search times have doubled, while CEO tenure has halved.
Klabin’s CEO Search: A Case Study
Klabin, Brazil’s largest paper manufacturer, recently underwent a six-month search for a new CEO. This involved 11 internal personnel and an external recruitment firm. The process highlights the challenges companies face in finding suitable
Read MoreMarket Structures: Understanding Competition and Pricing
Market Structures
Definitions
Market: A medium where buyers and sellers interact to exchange goods and services.
Demand Function: Indicates the quantity of a good or service consumers are willing to buy at each price level, considering factors like prices of related goods, consumer preferences, and income.
Supply Function: Indicates the quantity of a good or service producers are willing to sell at each price level, given constant production costs and business expectations.
Excess Supply (Surplus): Occurs
Read MoreUnderstanding Taxes, Money Supply, and Financial Systems
Direct Taxes and Income
Direct taxes are levied on sources of wealth, property, or income. Income taxes (Impuesto sobre la Renta de las Personas Físicas – IRPF in Spain) are imposed on the income of individuals, companies, or other entities.
Indirect Taxes and VAT
Indirect taxes are levied on consumption. VAT (Value Added Tax) or Impuesto General Indirecto Canario (IGIC) in the Canary Islands, is an indirect tax imposed on goods and services.
Consumption and its Elements
Consumption is the application
Read MoreKey International Accounting Standards (IAS) Overview
IAS 1 – Presentation of Financial Statements
Objective: To establish the framework for presenting general-use financial statements, including structure and content guidelines.
Abstract: Basic principles include going concern, uniform presentation, accrual accounting, and materiality. Financial statements are usually prepared annually. Any change in period must be reported.
A complete set of financial statements should include:
- A statement of financial position
- A statement of revenue and total expenditure
- A