Microeconomic And Macroeconomic: Issues & Effects On Economic Growth

Research Article
Rashmi Gujrati
Economics, Development , Macroeconomic, Microeconomics employment, Policy

Economists have focused on the development of theory, with a heavy center on internal logical consistency. There has also been much attempt devoted to the development of appropriate empirical techniques, in particular econometrics. Less concentration has been given to the requirements for applying the latter, econometrics, to analyze relationships particular in the former, theory These aspects of functional relationships are then discussed. They are the use of control variables, the nature of causality, and the need for structural permanence. The overall implications are that many problems are assumed away in experimental economic analysis. These can fundamentally disfigure the findings and hence provide confusing information for policy makers in low-income countries. Policy makers have traditionally considered the macroeconomic relations and the variables that can affect the economic objectives that they follow, such as prices, employment, balance of payments, and economic growth. Recently, microeconomic behavior has also been considered. To complete the analysis, it is necessary to include those variables that define the firm's development and activities, and cash flow could be this kind of variable to be included in the analysis.