Industrial organization (Economic theory)

In this thesis the literature of disequilibrium macroeconomic theory
was reviewed and the empirical relevance of the Keynesian interpretation
of the labor demand function was examined and contrasted to the
disequilibrium interpretation of Barro and Grossman, Patinkin's
disequilibrium theory of the labor market and Clower's partial
disequilibrium analysis of the commodity market were examined in depth.
The bulk of the literature review was devoted to the general disequilibrium
model of income and employment determination developed by Barro and
Grossman. Barra and Grossman's criticism of Keynes for predicting a
negatively sloped labor demand function was analyzed using regression
analysis to estimate the function. Barro and Grossman's criticism
was found to be based on insufficient evidence, and evidence presented
in this thesis supported the Keynesian position.

The current economic crisis has affected all aspects of life, which has resulted in political instability, personal financial troubles, and a growing number of business bankruptcies. While these are serious issues, simply developoing a government policy that injects an economy with money is not an appropriate means to achieve economic recovery and long-term economic development unless combined with an effective and efficient governing system. The present research studies whether the strong relationship between governance and growth exists during economic crises or only during non-crisis periods. The results of the current research show that the global economic crisis has had an influence on the relationship between governance and economic growth. In addition, this study found that different levels of development affect the relationship between governance and growth differently during times of crisis. Consequently, the results of the current research show the instability in the relationship between governance and economic growth during the economic crisis ; this unsteadiness is a sign of the need for long-term strategies to promote global and national good governance practices that are not adversely affected by crises.