Macroeconomic theory and evidence
Investment decisions of any firm and in the economy as a whole depend on a variety of factors. Investment involves understanding the effects of lags, future expectations and even the…
The accelerator theory explains the relationship between change in output or income and the rate of investment. In this theory, a change in income or output causes a change in…
The life-cycle hypothesis was postulated by Ando and Modigliani in an attempt to explain the behaviour of consumption function in the long and short run. According to this theory, current…