Many prominent economists have connected with society and made significant impacts to the economic scope of resourcing financial interest and embarking in independent productivity and innovation. Some major economic theorist includes Adam Smith, Karl Marx, and Milton Friedman. However, Alan Greenspan is one that in recent views made some impactful moves that changed the way the economy is seen and run. The changes made in earlier years, have affected higher education through today and the institutions need to review its financial framework in order to maintain its level of effective operation.
Theory in Detail
Alan Greenspan has been reported to be a laissez-faire economist. The point of view of being this type of economist is in the theory of a “free-market approach whose prices are determined by unrestricted competition” (encyclopedia.com). The free-market approach seems to be based on supply and demand effort where government control is limited. As a prominent economist, Alan Greenspan’s theory focused on total spending and the effects of inflation and recession. In other words, lowering interest rate to make borrowing funds easier and cheaper which are associated with productivity. According to Bonner (2002) “Greenspan’s theory was that by carefully controlling the cost of credit and the money supply, we could avoid severe economic downturns” (para. 6).
Greenspan has been scrutinized about his economic philosophy. However, the earmarks of his decisive reaction brought a series of both interest cuts and increases that lowered the federal funds rate on one end and inflated the prices later on the other end throughout his term as chairperson of the Board of Governors of the Federal Reserve System. ...
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...yond government interventions and more towards a maintained and innovative funding source from private and public investments.
Colleges and universities have been affected by economic changes. The challenges include reduced resources and greater demands, an example of past economic issues related to inflation and recession. The financial dislocation is something that schools are faced with, and a greater need for improved recovery needs to be explored. Greenspan was an economist that stepped outside the box and took chances, despite any constraints or criticisms. Greenspan’s approach is what needs to be revisited in the new age of financial trends and issues. The institutional focus should be on thinking outside the box and subsequently building an ability to adapt to constraints and new opportunities that led to long-term stability and productivity.
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