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Есonomic stagnation in emerging market countries: should this justify
?Keynes's law
Abstract
Есonomic stagnation in emerging market countries: should this justify
?Keynes's law
Sri Indah Nikensari, et al
Abstract
This study aims to determine the aggregate demand factors that affect
economic stagnation in middle-income emerging market countries, and
whether Keynes's law can be a solution to solve the problem with
increase demand. Using panel data from official sources such as the
World Bank, several factors were tested to determine the effect on
economic stagnation, at the 2010-2015 and 2010-2016 periods. By
employing panel data modelling (with fixed effect model), the findings
suggest that the decrease in household consumption, weak foreign
investment, inefficient government spending and decreased export
competitiveness have a significant positive effect on economic
stagnation, while a low inflation rate has an insignificant effect on
household consumption, as well as high lending interest rate have an
insignificant effect on the decrease in the inflow of foreign direct
investment. Therefore, Keynes's law must be applied appropriately by
increasing aggregate demand to encourage declining economic growth
through government interference
Keywords: stagnation; emerging market; aggregate side; Keynes's law
International Journal of Economic Policy in Emerging Economies, 2019 Vol.12 No.3, pp.299 - 314
Introduction
Does the global economic stagnation (ES) continue until late 2016? Because, the world economic growth in 2016 is slowing and lower than previously estimated, that is only at 2.4% from 3.9% forecast
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the factors that affect ES can be seen in aggregate demand (AD) and aggregate supply (AS). The model of AD and AS are models in macroeconomic theory that explain the relationship between price and output levels, as explained by Keynes. Changes in prices will lead to changes in demand, and prices are strongly influenced by the rate of inflation
