The Affects from the Financial Crisis Over the Agro Economy in Developed and Developing Countries (with Review for Republic of Macedonia)
6 Pages Posted: 15 Jul 2012
Date Written: July 14, 2012
The aim of this paper is to examine current macroeconomic thought about economic and financial crisis. Since 1960’s two schools of thought are pre-dominant in macroeconomics Keynesian and neo-classical. Many authors from neo-classical economists such as Robert Lucas (1976), gave a critique to macroeconomic policy and characterize the existing macroeconomic models that relied upon historical aggregate data to design macroeconomic policy as useless. They couldn’t help to design a macroeconomic policy. Many authors point out on crisis as all bad things that could happen to good investors. Asymmetric information’s create agency problems between investors and firms. Asymmetric information’s can distort efficient investment choices (investors may choose less efficient projects). These may also, as a consequence increase monitoring costs, for the investors. This will also reduce net-welfare. Perhaps the paradox of developing countries, and industrialized economies commonly subsidize agriculture is the question that raised the most attention in this regard. Existing view in the macroeconomics is that more attention should be given on deviations from an established path of agricultural protectionism. In the past period over the years eloquent pleas were written by the agricultural economists for less government intervention in agricultural markets. While their arguments are persuasive, the demand for government intervention expressed through the political process remains strong. However, in conclusion on this part as a task of new agro-economists is to look for new policy directions.
Keywords: asymmetrical information, financial crisis, agro economy, agro economy structure in Macedonia
JEL Classification: N5
Suggested Citation: Suggested Citation