The paper investigates how including the distribution of wealth changes the demand effects of redistributing functional income. It develops a model with an endogenous wealth distribution and shows that the endogenous rise in wealth inequality resulting from a redistribution towards profits weakens the growth effects of this redistribution. Consequently, a wage-led regime becomes more strongly wage-led. A profit-led regime on the other hand becomes less profit-led and there may even be a regime switch - in this case the short-run profit-led economy becomes wage-led in the long run due to the endogenous effects of wealth inequality. The paper thereby provides a possible explanation for the instability of demand regimes over time. / Series: Ecological Economic Papers

To resolve the inflation caused by overheated economy in 1992, China executed Macroscopic Control Policy to stabilize the fluctuation of price standard in 1993. It seemed to achieve the effort of controlling inflation. However, because of longtime Macroscopic Control Policy after Asian Financial Crisis, it resulted in negative impacts. CPI in China has been minus quantity for 39 months from October in 1997 to December in 2000. And CPI turned plus into minus from April in 1998 to January in 2000. And CPI turned plus into minus from April in 1998 to January in 2000. The growth rate of RPI is -2.6% and that of CPI is -0.8% in 1998. It declined to -3.0%(RPI) and -1.4%(CPI) in 1999. The growth rate of GDP has fallen down since 1992. The main purpose of this paper is to explore the reason of the deflation late in 1990 in China. I want to find out why deflation was happened in china? What is the main cause of deflation in china? What are the impacts and shocks to china economic growth by these causes? How are the impacts and shocks to china economic growth by these causes? The whole supply and demand and money contraction resulted in the downfall of GDP and CPI. To prevent the phenomena of overheated economy since 1993, most of investment moved away China because of Macroscopic Control Policy. Under this kind of situation, we couldn¡¦t say that the investments were excess. Therefore, the main reason isn¡¦t prices dropping caused by too much supply. China continued Deflation Policy after Asian Financial Crisis in 1997, so the speed of economy development decreased slowly. It also reduced the whole consumption, public spending, investment export, and money supply and demand. The effect of negative development resulted in the deflation of economy development.

Šiame darbe nagrinėjama vyriausybės vykdomos fiskalinės politikos įtaką visuminei paklausai Lietuvoje. Darbe yra apžvelgiama vyriausybės vartojimo išlaidų bei visuminės paklausos komponentų pokyčiai nuo 1995 iki 2007 metų. Teorinėje dalyje aptariamos pagrindinės Keinsistinės teorijos, kurios nagrinėja fiskalinės politikos įtaką visuminei paklausai, naudojant IS-LM ir AD-AS modelius. Taip pat teorinėje dalyje yra parodoma biudžeto deficito mažinimo įtaka ekonomikai. Darbe atliekama regresinė analizė, kuri įrodo, kad egzistuoja statistiškai reišmingas ryšys tarp visuminės paklausos ir valdžios sektoriaus vartojimo išlaidų. Pabaigoje pateikiamos rekomendacijos, kaip sustiprinti biudžeto išlaidų poveikį visuminei paklausai. / In this thesis the relationship between fiscal policy and aggregate demand in Lithuania is investigated. The first part of the work shows changes of government consumption expenditure and components of aggregate demand in period 1995 - 2007. The theoretical part analyses the main Keynesian ideas which research relationship between aggregate demand and fiscal policy, using IS-LM and AD-AS models. Also theoretical part shows how the reduction of budged deficit influences interest rates, aggregate demand, prices. In the last part aggregate demand is regressed against government consumption expenditure, interest rates, inflation and income. Results suggest that there are statistically significant relationship between aggregate demand and government consumption expenditure. Finally some recommendations are made in the end of the work.

China's economic development has performed spectacularly during the period of China's economic transition as a result of radical economic reform in the all markets. The country has also gone through extensive fiscal reforms in the last three decades. However, a number of problems have been associated with such rapid economic growth. One of these has been raising inequality. In both Keynesian and neoclassical endogenous growth theories, public spending can play an important role for economic growth and inequality. The majority of previous studies have focused on the relationship between public spending and economic growth, or between public spending and inequality separately. There is no doubt that public spending has an effect on both economic growth and equity simultaneously. In this respect, this thesis attempts to address the problems that have emerged during the period of China's fiscal reforms, and seeks to examine the effects of public spending on economic growth and equality in the same model. This thesis investigates the dynamic relationships among these three variables in China. For aggregate national data, vector error correction model (VECM) has been used. Analysis at the provincial level is based on the panel vector auto-regression (PVAR) model. These methods help to solve the endogeneity in estimations. The national level analysis indicates that total public spending shows a long term Granger causality with GDP per capita, which supports the positive growth effect of public spending in the Keynesian and endogenous growth model. Social public spending has a negative effect on real output per capita in both the short term and long term, but it also has a negative impact on income inequality. Moreover, we find that a higher level of real GDP per capita will increase the level of inequality, but a higher level of inequality has a negative effect on real GDP per capita in the long term. Furthermore, total provincial public spending and provincial social spending have either a non-significant effect on economic growth. On the other hand, the SOEs' investment has a significant, positive growth effect at both the national and provincial level. As for the redistributive role of the public spending, the provincial total public spending and social spending have played an important role on income distribution. Furthermore, the Gini coefficient has a positive effect on the per capita growth rate at the provincial level, but the economic growth has no significant impact on the Gini coefficient.

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This paper analyzes and distinguishes the role and importance of the shocks related to the aggregate demand and aggregate supply on the behavior of the Peruvian inflation during the period 1997:1-2009:2. We use the methodology based on structural vector autoregressive (SVAR) models using a long-run identification based on Blanchard and Quah (1989) which allows to obtain the historical decomposition of the annual inflation. Unlike Salas (2009), this paper uses a more simple model of aggregate demand and aggregate supply, and a larger sample. The results show that the behavior of inflation was largely explained for shocks related to the aggregate demand side in comparison with aggregate supply shocks. Furthermore, the results of the variance decomposition of the prediction error show that in the short and long term, the shocks of the demand side explain around 70% and 60% of the movements of the inflation. The results are robust to the inclusion of different variables in the set of information. / Este documento distingue y explica el rol y la importancia de los choques de demanda y oferta agregada en el comportamiento de la inflación peruana durante el periodo 1997:1-2009:2. Para esto se utiliza la metodología de Vectores Autoregresivos Estructurales (SVAR, por sus siglas en inglés) con una descomposición de largo plazo propuesta por Blanchard y Quah (1989), lo que permite obtener la descomposición histórica de la inflación anual. A diferencia de Salas (2009), el presente trabajo se basa en un modelo simple de demanda y oferta agregada, y una muestra más amplia. Los resultados muestran que el comportamiento de la inflación obedeció en mayor medida a choques de demanda agregada en comparación con los choques de oferta agregada. Los resultados de la descomposición de la varianza del error de predicción muestran que, en el corto y largo plazo, los choques de demanda agregada explican alrededor del 70% y 60% de los movimientos de la inflación. Los resultados son robustos a la inclusión de diferentes variables dentro del conjunto de información.

This essay presents a theoretical foundation for the analysis concepción on the formation of the equilibrium between aggregate supply and aggregate demand in the classical model. To arrive at the considerations presented here, the history of classical economic thought was taken into account, drawing as a starting point the rupture of mercantilism. From this historic mark it was possible to describe the main names that were responsible for changing the economic conception during the years that followed. It was also tried to report some of the your most import contributions to the formation of orthodox ideas of the classical school, which are in force and are reformulated up to the present moment. With the construction of the theoretical and graphic model, then presents the importance and coherence coexistente in the exposed model, evidencing its impacts on the evolution of economic thinking. / Este ensaio apresenta a fundamentação teórica para a concepção da análise sobre a formação do equilíbrio entre oferta agregada e demanda agregada no modelo clássico. Para chegar a considerações aqui apresentadas levou-se em estima a história do pensamento clássico econômico, traçando como ponto de partida a ruptura do mercantilismo. A partir deste marco foi possível descrever os principais nomes que foram responsáveis pela mudança da concepção econômica durante os anos que se seguiram. Procurou-se, ainda, relatar algumas de suas principais contribuições para a formação das ideias ortodoxas da escola clássica, que vigoram e são reformuladas até o presente momento. Com a construção do modelo teórico e gráfico mostrou-se a importância e coerência coexistente no modelo exposto, evidenciando seus impactos na evolução do pensamento econômico.