1. bookVolume 4 (2015): Issue 3 (September 2015)
Journal Details
License
Format
Journal
eISSN
2336-9205
First Published
11 Mar 2014
Publication timeframe
3 times per year
Languages
English
Open Access

Essay on Saving and Consumption

Published Online: 07 Oct 2015
Volume & Issue: Volume 4 (2015) - Issue 3 (September 2015)
Page range: 123 - 136
Received: 20 Apr 2015
Accepted: 13 May 2015
Journal Details
License
Format
Journal
eISSN
2336-9205
First Published
11 Mar 2014
Publication timeframe
3 times per year
Languages
English
Abstract

Consumption and saving decisions are at the heart of both short- and long-term macroeconomic analyses. Since the global crisis outbreak, one of the main issues for indebted countries has been whether to pursue a policy which promotes saving or to try to induce economic growth by increasing consumption. Consensus has not been reached on this issue, which is based on an old debate of whether a country should pursue a policy of Keynesianism or monetarism.

Ergo, this essay discusses arguments supporting both approaches, primarily through theoretical arguments of Keynesianism and monetarism. The authors concluded that in a crisis environment, consumption policy should be given priority; however, a precondition for this is that a country was not overburdened prior to the crisis outbreak, i.e. a successful crisis management policy should, in fact, be pursued over the periods of expansion.

Keywords

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