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What’s going on in the World Macroeconomics without Graphics and Equations!



Why study macroeconomics? The short answer is this is the key to understanding economic events in the world. The opportunity to see what’s happening now and even to look to the future. Macroeconomic factors affect everyone’s life. We usually only see the tip of the iceberg. What is the whole picture?

You may have already studied macroeconomics by looking at equations and diagrams. However, this approach often distracts attention from important ideas and beings. In the book “A Short Course in Macroeconomics”

Short course in macroeconomics David Moss, a professor at Harvard Business School, examined the basic concepts, principles, and relationships that apply to our lives. It turned out to be understandable and scientific at the same time.

Foundation of the Economy

The basic rules of macroeconomics seem a lot easier if you look at them as an example of your budget. If you want to consume more than you produce, you have to borrow. But for you to be able to borrow, someone has to lend you money, which means producing more than it consumes. Then you have to repay the loan, most likely with interest. Therefore, in some periods it is necessary to consume less than to produce.

The situation is roughly the same for the country.

The central concept in macroeconomics is national production or GDP. It is a large volume of production and not a lot of money that creates wealth for the nation. The government can print as much money as you want and turn citizens into millionaires. However, this does not make sense if the production volume does not increase. And if it shrinks, the material situation of citizens will deteriorate despite the abundance of money in their pockets.

Purchasing Power Parity

The purchasing power parity model is used to calculate the exchange rate of a currency. The key idea of ​​the model is borrowed from the so-called unit price law: a currency unit (e.g. a dollar) should have the same purchasing power in every country, as long as there are no transport costs and taxes.

However, inflation threatens to undermine parity.

For example, if inflation is higher in the United States than in the United Kingdom, Americans will soon find that a dollar can buy more goods in Britain than in their own country. To restore parity, the dollar must lose part of its value. The process continues until the same amount of goods can be bought for the dollar in the United States and the United Kingdom.

Expectations and Production volume

Expectations are another very important issue in macroeconomics. They affect everything. Including – the production volume. Since the production generates an income that corresponds to the value of the product produced and sold, the total amount is sufficient to buy the entire product produced. However, when citizens face difficult times, they can cut costs by creating a gap between supply and demand.

As a result, the economy is in a downward spiral: consumers choose to spend less, companies cut their workforce and cut costs so as not to produce “additional” products. Rising unemployment leads to lower incomes, which in turn reduces the demand for solvents.

The economist John Keynes called this situation a “paradox of poverty in the midst of wealth”.

The principles and relationships shown in the book shed light on a variety of economic phenomena. Many of them shape the business environment and influence the risks and benefits of the decisions we make every day. The book will help you figure out how everything works. Knowledge of the basics of macroeconomics does not exclude uncertainties and crises from life, but helps to better understand their nature and mechanisms. And that means making more informed decisions even in difficult situations.

Prepared from the book “A Short Course in Macroeconomics”.

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What is the Difference Between Losers and Winners



What is the Difference Between Losers and Winners


What is the Difference Between Losers and Winners

Man is a social being, for his survival, he needs a group. Unsurprisingly, a large proportion of our instincts and programmed behaviors are geared toward building intragroup relationships — collaboration and competition for resources. There are three basic strategies for this interaction: take, give and exchange. More details – in this material, prepared according to the book “Find a Mentor“.

Three strategies

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Depending on the circumstances, we can use any of the three strategies, but, as a rule, each of us has one that we prefer.

“Exchangers” – these are those who act on the principle “I give, so that you give me too.” They are the majority in society. Their focus is justice.

“The takers” – focused on maximizing their own benefits in a relationship. The interests of others do not bother them.

Finally, there is also “Givers” – these people are focused on selfless help to others. Their focus is relationships.

What is the Difference Between Losers and Winners

What is the Difference Between Losers and Winners

Which of these strategies is more winning? Based on the research data, the following can be said. In the early stages, the takers are the most successful, while the givers are the outsiders.

As you move up, the picture changes to the opposite. There are almost no “takers” at the heights of success. But among those who have achieved outstanding results, there are unexpectedly many “giving”. The “exchangers” show stable average results at all levels.

People who are focused on their own benefit rarely reach the top. The reasons for this are obvious. A systematic disregard for the interests of others alienates those around them and increases hostility. In other words, within the framework of this strategy, each subsequent step repels friends and multiplies enemies. As a result, sooner or later, a person remains alone. It’s good if by that time he manages to reach the top.

But even so, success often looks like this: you are sitting in a tree, under which a pack of hungry wolves has gathered.

Another strategy of greatest interest is “give”. According to research conducted, most selfless and selfless altruists who are concerned about the welfare of others and are willing to help them to the detriment of their own interests are losers, which seems quite natural. On the other hand, it is the “givers” who achieve the greatest successes.

What is the Difference Between Losers and Winners

What is the Difference Between Losers and Winners

Key factor

Why? Is this a game of chance, or is there some factor that distinguishes successful givers from unsuccessful ones? Such a factor really exists. And this is your environment. Both are equally trying to help everyone and do not expect immediate rewards. Both those and others in response receive the sympathy and approval of others. Some of them seek to provide a reciprocal service – they are “exchangers”. Some take advantage of the value they receive without considering it necessary to give something in return – these are the “takers.”

The difference between losers and winners is what happens next.

The loser continues to help everyone equally. And here everything depends on the case – how many “takers” will be in his environment. If not enough, he will survive. If there is a lot, it will quickly lose all resources and opportunities for growth. The winner, on the other hand, knows how to identify the “takers” and remove them from his circle, so a network is gradually formed around him, which together brings him more than he put into its formation. From some point on, it becomes a key success factor. And the sooner he learns to do this, the higher his chances of achieving outstanding results.

Prepared according to the book “Find a Mentor“.

What is the Difference Between Losers and Winners

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