Journal of Advances in Developmental Research

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A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

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The Microeconomic Foundation of Market Performance: Supply, Demand, and Structural Determinants of Economic Welfare

Author(s) Dr. G. Nagoji
Country India
Abstract The macroeconomic trilemma represents one of the most persistent challenges facing modern economies: the simultaneous pursuit of robust GDP growth, full employment, and price stability. This paper examines the theoretical foundations and empirical evidence surrounding the trade-offs inherent in achieving these three macroeconomic objectives simultaneously. Through analysis of data from major developed economies and India between 2000-2017, we investigate the policy mechanisms and institutional frameworks that have proven most effective in managing these competing goals. Our findings suggest that while perfect simultaneous achievement of all three objectives remains elusive, coordinated monetary and fiscal policy approaches, coupled with structural reforms and institutional independence, can significantly improve outcomes across all dimensions. The analysis reveals that countries with more flexible policy frameworks and stronger institutional capacity demonstrate superior performance in managing the trilemma trade-offs. We conclude that the key to addressing the macroeconomic trilemma lies not in choosing between objectives, but in developing sophisticated policy coordination mechanisms that recognize the dynamic interactions between growth, employment, and inflation. These findings have important implications for policymakers navigating increasingly complex global economic environments, particularly in the context of technological disruption, demographic transitions, and evolving labor market structures.
Keywords macroeconomic trilemma, GDP growth, full employment, inflation control, monetary policy, fiscal policy, policy coordination, economic stability.
Published In Volume 10, Issue 2, July-December 2019
Published On 2019-10-05
Cite This The Microeconomic Foundation of Market Performance: Supply, Demand, and Structural Determinants of Economic Welfare - Dr. G. Nagoji - IJAIDR Volume 10, Issue 2, July-December 2019.

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