Macro Economics is about the economic management of governments. Governments increase the amount of money they use to stimulate the economy during times when the economy is slow as in the current Global Economic Downturn. On the other hand when the economy is going well Government withdraw their financial backing as the economy may overheat and it would be inflationary for governments to use Fiscal stimulus during these periods.
The other form of non-business stimulus is the lowering of the interests rates by the central bank. In Australia’s case this is the Reserve Bank of Australia. When the economy is not performing well the RBA lowers interest rates to encourage investment by industry in new industrial projects. They employ people.
This gives the employees wages with which to pay their mortgages and they have some spare cash with which to go on holidays. They may buy a low cost air line ticket. On the other hand they may not given the bad reputation these carriers have they may buy a middle of the range one. I site the success that Virgin Blue has had in the past year making a record profit. Tiger Air has not done so well. It is a cut price air line with a not so good reputation. On the other hand Jet Star – the QANTAS budget carrier has carried that upmarket airline through it worst year economically for a long time. People have found QANTAS too expensive and travelled Jet Star. These are all Micro Economic factors. But the having of extra cash from government stimulus spending is where Macro Economic policy has influenced travellers ability to spend and Monetary Policy with Lower Interest rates has meant that they have lower mortgages so they have more cash to spend on other things – eg holidays – air travel.
The low – cost airlines industry is about private enterprise. It is therefore part of the Micro economic area of economic study. If you want to concern yourself with the impact that Fiscal Stimulii by governments around the world are having upon the activities of various airlines then you would have to go country by country and look at the performance of different airlines as a result either directly or indirectly of Fiscal Stimulus or Monetary Policy.
I hope that this information has helped clear the air a bit for you.
Macro Economics is about the economic management of governments. Governments increase the amount of money they use to stimulate the economy during times when the economy is slow as in the current Global Economic Downturn. On the other hand when the economy is going well Government withdraw their financial backing as the economy may overheat and it would be inflationary for governments to use Fiscal stimulus during these periods.
The other form of non-business stimulus is the lowering of the interests rates by the central bank. In Australia’s case this is the Reserve Bank of Australia. When the economy is not performing well the RBA lowers interest rates to encourage investment by industry in new industrial projects. They employ people.
This gives the employees wages with which to pay their mortgages and they have some spare cash with which to go on holidays. They may buy a low cost air line ticket. On the other hand they may not given the bad reputation these carriers have they may buy a middle of the range one. I site the success that Virgin Blue has had in the past year making a record profit. Tiger Air has not done so well. It is a cut price air line with a not so good reputation. On the other hand Jet Star – the QANTAS budget carrier has carried that upmarket airline through it worst year economically for a long time. People have found QANTAS too expensive and travelled Jet Star. These are all Micro Economic factors. But the having of extra cash from government stimulus spending is where Macro Economic policy has influenced travellers ability to spend and Monetary Policy with Lower Interest rates has meant that they have lower mortgages so they have more cash to spend on other things – eg holidays – air travel.
The low – cost airlines industry is about private enterprise. It is therefore part of the Micro economic area of economic study. If you want to concern yourself with the impact that Fiscal Stimulii by governments around the world are having upon the activities of various airlines then you would have to go country by country and look at the performance of different airlines as a result either directly or indirectly of Fiscal Stimulus or Monetary Policy.
I hope that this information has helped clear the air a bit for you.
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