We might think that the crisis has changed economics but is has not; rather, it has changed the way people view at ECONOMICS, economists and non-economists people. Everyone is connected with Economics one way or the other and economics treat every one as its agent, and more precisely as economic agents. Consciously/un-consciously we are at its job. To relate it with a more scientifically proved phenomenon which we famously call the CHAOS-theory (not sure about its origin, the word) which says under the cosmos run an underlying reality. Manifested and/or identifiable. For the majority, particularly individuals i do not know either it is manifested/identifiable, or both. For me as an economist, im not a complete, and as a man or common man, or both, i see money/wealth, and as a common man in particular, i see that we are all living- beings, we are all living, we are not dead, even collectively. Can we say “yes”? Or we would like point out the colours? Even there we are one. We use same kind of colors and with almost same frequency in our daily lives. When we go to shops our preferences are not colors. We go to shop and do not say “ I want toffee with a with color for my kids”. Kids may do that. We say 4 toffes or 1 Kg sugar. Colour white/brown? Not often, but some do. Who? And nobody says we are alive we want this thing. In shopping malls, we go and pick the article we want, ask or read the prices and pay for it. Are we ? I know we all. Or, the other thing we say i’ll pay later, its for convenience without creating ripples in the system, if the provider it not constrained or can manage. They work with a capacity for such a convenience to the consumer. It’s a commitment to pay later. And most of the times we pay for it in many forms. But you should have a good history and/or a good-rapport. This was all to review our systems. The BASICS. Is that?
So we were at the chaos theory. It, in particular says, “even the apparently random phenomenon have underlying order.”
The terror of inflation in the minds of economists is same as the fear of a prices rise in a common man’s head. But at the question of relating inflation to a common price rise we will not find many satisfying answers form a laymen/common-man. An increase in demand for money to contain purchasing power or the cost of livelihood results in inflation and in some cases higher interest rates. In a nutshell, interest rate is the cost of maintaining/manipulating consumption and its business is banking. Many times consumption soon/er. Usually higher interest rate results in higher savings and sometimes at the cost of consumption. Both consumption and saving patterns are flexible upwards in the long-run. But when compared in the short-run consumption is more flexible upwards than the saving pattern which results in higher demand and inflation. Inflation is a short-run pheonomenon in the long-run we do not assume inflation.
There is something as economic consciousness same as in any other field, a state in which claims that he is sufficient to tackle a situation pertaining to his/her economic well-being in order to feel a sense of stability on a physical/material as well as mental/psychological level. This economic consciousness is rightly called by Joseph Stiglitz as information (a)symmetry. How to deal with an economic crisis with the resources at hand would place many of us in an uncomfortable situation and more uncomfortable with limited resources. How to manage resources and how to use a market for best possible outcomes/returns is not less important than any art of living because it adds to a sound survival. The point here is to make the masses more conscious to deal with an economic situation and crises, in particular, and not only the privileged ones, and requires a proper training to use market and not to be used by it.
Markets may be sufficient /insufficient in supplying demands given the incomes depending upon the size of market. Naturally a big market will have more options/substitutes to cover every income group. Understanding the markets and their attributes is not an easy task and only those who want to know it know it. We can find out an array of attributes of specific markets.
Inflation does not pose much problem for those who have right information and/or reserve capacity but for those who do not have these. Since these are indispensable for choice they can help in altering the consumption pattern of the economy as a whole, although in parts. Efforts are required to educate people to help government to tackle inflation down and the pressure to increase interest rates. The problem may not be solved altogether but we can always reduce the pressure through right choices with in our budgets.
So we were at the chaos theory. It, in particular says, “even the apparently random phenomenon have underlying order.”
The terror of inflation in the minds of economists is same as the fear of a prices rise in a common man’s head. But at the question of relating inflation to a common price rise we will not find many satisfying answers form a laymen/common-man. An increase in demand for money to contain purchasing power or the cost of livelihood results in inflation and in some cases higher interest rates. In a nutshell, interest rate is the cost of maintaining/manipulating consumption and its business is banking. Many times consumption soon/er. Usually higher interest rate results in higher savings and sometimes at the cost of consumption. Both consumption and saving patterns are flexible upwards in the long-run. But when compared in the short-run consumption is more flexible upwards than the saving pattern which results in higher demand and inflation. Inflation is a short-run pheonomenon in the long-run we do not assume inflation.
There is something as economic consciousness same as in any other field, a state in which claims that he is sufficient to tackle a situation pertaining to his/her economic well-being in order to feel a sense of stability on a physical/material as well as mental/psychological level. This economic consciousness is rightly called by Joseph Stiglitz as information (a)symmetry. How to deal with an economic crisis with the resources at hand would place many of us in an uncomfortable situation and more uncomfortable with limited resources. How to manage resources and how to use a market for best possible outcomes/returns is not less important than any art of living because it adds to a sound survival. The point here is to make the masses more conscious to deal with an economic situation and crises, in particular, and not only the privileged ones, and requires a proper training to use market and not to be used by it.
Markets may be sufficient /insufficient in supplying demands given the incomes depending upon the size of market. Naturally a big market will have more options/substitutes to cover every income group. Understanding the markets and their attributes is not an easy task and only those who want to know it know it. We can find out an array of attributes of specific markets.
Inflation does not pose much problem for those who have right information and/or reserve capacity but for those who do not have these. Since these are indispensable for choice they can help in altering the consumption pattern of the economy as a whole, although in parts. Efforts are required to educate people to help government to tackle inflation down and the pressure to increase interest rates. The problem may not be solved altogether but we can always reduce the pressure through right choices with in our budgets.
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