ENTREPRENEURS…

Entrepreneurs are a class of people who take risk of investment under the uncertain market conditions and earn profits. So to be to the point, an entrepreneur is person who takes risk on investment. But, that is a standard textbook (Economics) definition. In a more encompassing sense, anybody who works’s under uncertain economic conditions, whether he is an investor or not, can be said to be a part of the definition. The work of an entrepreneur is to organize something that has fair chances of being a success or a failure. He introduces novel concepts, which he thinks, are important. There are a few types of entrepreneurs of which business and social entrepreneurs are important. You can also describe entrepreneurs with the word, catalysts, very often they are pioneers in their field. The success and failure of any idea also comes in the purview of risk.

A feasibility report, to evaluate the chances of success and failure of a particular business, tailored according to the specific needs, is a very important before starting a business. It is an insight into the variables that are crucial for its take-off. The demand and supply conditions of specific regions, cost, available players in the market, consumers’ choice and preferences, etc., are all considered in a feasibility report. To furnish the purpose you can take help from professionals, you will find many consultants, who can craft you a good feasibility- report. They use tools, like available studies, internet-surveys, telephonic-surveys, or you can do a pilot experiment, in which you can launch your business on a very micro-level to get the initial results to decide for a full fledged start.

Simply, presence in the market would not solve the purpose. In order to get a strong hold in the market you need to create a little difference, all you need is an identity there. Availability of your product at each selling point is the first step you can make to be sure that it is with consumer’s reach. When we talk about competition the first thing that comes to mind is the price, beside quality. A lower- launch price is a good strategy, and is often used and when the customer becomes loyal, you can consider an increase. These are common for a new product in any market. Thereafter innovations- changes in look, quality, shape, weight, etc., are important to be in demand. In the long-run, the one thing that is most crucial to remain competitive is cost cutting, but, that’s a curvy issue for prices are always on the rise be it raw-materials, intermediate-goods, or final-goods. But, to be an efficient player in the market, a lower cost of production and a lower price always brings fortune.

Inequality in the US...

I found this good piece on inequality in the US;

ftp://ftp.igier.unibocconi.it/wp/2011/402.pdf

Default would be Contractionary...

Article;

http://krugman.blogs.nytimes.com/2011/07/25/default-in-a-liquidity-trap-very-wonkish/

Comment;

I agree that the effects of default and inflationary expectations due to quantitative easing would be different. A default would decrease money supply in reversing and new loans could not be generated and the whole system would be in a contractionary mode whereas generating inflationary expectation through quantitative easing would be expansionary. A default would undermine all the calculations made in order to keep the economy healthy and would necessitate big changes in the system. I can remember Krugman’s suggestion given earlier about an effective default regarding the people’s loans made during the housing bubble and now this time we are considering a default on the part of the US government to payback its debt. It is like we are back in the same situation again and the whole discussion has turned to the same point of a contracting economy because of default of the debt generated during the past. The threat of default will obviously be contractionary and would increase interest rate because the supply of loan-able funds will be inhibited since government is unable to repay its loans and new loans can not be generated without printing more money.

Imports can accommodate domestic demand...

Article;

http://economictimes.indiatimes.com/news/economy/policy/food-security-law-could-push-up-world-prices-widen-subsidy-bill/articleshow/9353459.cms

Comment;

The concern here is about importing food to deliver food security bill, but, that is about future. In future as far as food imports are concerned, we are in a transition period regarding the exchange rate of rupee which is expected to become stronger, exports is increasing which are good signs from the point of view of balance of payments. It is reducing. Food is among the most important thing that moves man and an economy, too. Without food security the rate of credit growth is also not possible because the central bank would increase interest rate to keep a tab on inflation. When growth is in question we compare ourselves with China which is also a big importer of food. It is common sense that an economy can not grow without food because people would not grow. The problem for INDIA is not world prices but the hunger of the domestic economy. We have to feed empty stomachs. Prices are not a problem as long as we have money to pay for it and in the international trade we value exchange-rate rather than international prices. Resorting to cash transfer schemes, successful in Brazil, without availability of food to sell will increase prices more than the economy can bear. “Too much money chasing too few goods.” Imports are a good source to accommodate for domestic demand.

Hoover...

Article;

http://krugman.blogs.nytimes.com/2011/07/18/herbert-hoover-was-hooveresque/

Comment;

Resorting to printing press, as Hoover said, will devalue the dollar and will decrease the purchasing power of $. But, that would happen also when we will improve money supply in any form. Its basic economics when money supply is increased it devalues the purchasing power of $. Actually, it devalues $ in terms of other currencies in international arena. Today, the situation is different. Inflation has been properly anchored and prices were in a deflating mode, not long ago, and, we can bear inflation some more if it comes with recovery. Devaluing dollar at this point of time will help increasing exports for the country. If wages and salaries increase this time it will affect the prices only marginally and increase in wages would and should also mean increase in real wages. The government has not used fiscal policy in any real sense. Keynes said that if there is no work for the government to do which can boost effective demand then the government can simply dig pits and re-level them. But i do not think the government has no real work to do in the US. Fiscal policy at this point of time is expected to do two things. It will increase employment and will infuse demand, internally. Fiscal stimulus used so far has been of a different nature and were aimed at improving balance sheets of the banks. We need fiscal policy is some real sense…

Use Fiscal Policy...

When it comes to growth the trade-off between inflation and employment is in question. The thing that is dominating the current situation is inflation in face of high unemployment. Quantitative easing although concentrating on increasing money supply is not sufficient in improving demand which is not in line with the classical rule, "supply creates it own demand." Demand is created when there is an improvement in wages or effective demand. In the US demand, even after two rounds quantitative easing, is sluggish. The US economy should concentrate on policy that increases wages. The central bank is only responsible for managing the money supply which has bought bonds to facilitate money supply and economic activity, but it did not work as was expected to and is fading away. The next tool the economy has, to use its fiscal policy which directly affects demand and wages. The question arises is that why we can not pay for fiscal policy through quantitative easing? Why the government can not directly use the money for fiscal policy? The answer is that we expect central banks and government to work independently to avoid another recession to occur. The great recession was the result of too much reliance on monetary policy to generate growth but it tumbled later. Through fiscal policy the government should concentrate on increasing wages. Fiscal policy is expected to increase demand for labor and increase employment which the economy wants at this point of time.

Flexible Exchange-Rate (to share)...

This paper with data is helpful in explaining good effects of flexible exchange-rate on inflation, and, domestic-demand and supply. Especially, appreciation...

http://www.nber.org/~confer/2011/ISOM11/Eichengreen_Rose.pdf

Barter the food stock...

Article;

http://economictimes.indiatimes.com/features/financial-times/the-mighty-pinch-indians-spent-rs-58-trillion-more-owing-to-inflation/articleshow/9083318.cms

Comment;

The article points to the price movement since 2008. Form a farmers point of view we need to see that higher prices are translated in farmers profit. If it has positively impacted farmers' and farm labors' income whose composition is around 60% in Indian population then we can say that the growth in the last three year has contributed in reducing poverty and inequality within Indian-Economy. If it has not, we can say that growth has just benefited middle and upper classes in form of higher income and low consumer durables' prices in the last three years. Liberalization of the food sector is good for farmers and farm income but bad for unemployed people living in poverty without farms because there is no mechanism which can ensure parity wages in the un-organised sector. As far as food inflation is concerned India has sufficient stock of wheat and rice which the government can trade for food items which are deficient in supply. The government can barter the stock of wheat and rice stocks for food items whose share in food basket and price of food basket is high. However, FDI in retail is supposed to do the job in terms of supply of food items but it remains a paradox how the poor is going to pay for food if his income does not increase or if it increases but insufficiently. FDI in retail will increase the competition for creating stocks of food and will push prices up but if our income remains a constraint how the poor is going to be compensated, if not through wages.