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
    • 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
        • 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
    • 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


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