Nothing is permanent in Economics or, in Life, in the short run, there is more upheaval, and the effort is to make the long always bright... we move in cycles... Good and bad are repeatedly followed by each other... Low base increases expectations..."
“According to recent data, India ranks around 133rd
globally in terms of GDP per working hour, indicating a relatively low labor
productivity compared to other countries; with an estimated GDP per working
hour of around $8.
Key points about India's GDP per working hour:
Low ranking:
Due to its low labor productivity, India is positioned
near the bottom of the list when compared to other countries.
Source:
This information is based on data from the
International Labour Organization (ILO).
Long working hours:
Despite long average working hours, India still has
low productivity per hour worked.
High productivity means high supply...
In economics, "productivity" refers to the
efficiency of production, measuring how much output is produced per unit of
input (like labor or capital), while "supply side" refers to the
policies and factors that influence the ability of an economy to produce goods
and services, with the primary focus on increasing the productive capacity of
an economy by enhancing productivity through measures like investment in
technology, education, and deregulation; essentially, supply-side policies aim
to boost economic growth by increasing the overall supply of goods and services
in the market, often through improving productivity levels.
Key points about productivity and supply side:
Relationship:
Productivity is a key component of the supply side of
an economy, as higher productivity means more output can be produced with the
same amount of resources, leading to increased economic potential."
Masses are not conscious of their power ... if prices
are high they shall exercise the choice of alternative... if they lower demand
and price expectations... firms would increase supply... which would lower
actual prices...
"Inflation expectations are the anticipated rate
of inflation that people expect to occur in the future. These expectations are
based on people's perceptions of how prices will change over time. They are
important because they can influence current economic decisions that can affect
actual inflation outcomes.
Here are some ways that inflation expectations can
affect actual prices:
Firms
If firms expect inflation to be higher, they may raise
prices of their goods and services faster.
Workers
If workers expect inflation to be higher, they may
demand higher wages to make up for the expected loss of their purchasing power.
Consumers
When people expect inflation to increase, they may
spend more and save less.
Inflation expectations are a crucial factor in
monetary policy decisions. Central banks should consider both long-term and
short-term inflation expectations."
Supply creates demand... Suppose supply has to be
increased and demand is delayed during high inflation. In that case, RBI must
lower inflation expectations which could be self-fulfilling while maintaining
high interest rates which could result in actual low inflation and increased
demand... Low prices increase demand and price expectations and vice versa...
It is the nature of prices to be volatile due to changes in demand and
supply... Nowadays inflation moves between a target as set by the central
banks, they are responsible for creating price expectations by investors and
outcomes. The problem arises when outcomes are not as per expectations due to
uncertainty... People try to avoid loss and increase gain, and the central
banks, too...
We should not forget that depreciation could increase
imported inflation, especially oil prices, as it increases inflation
expectations..." Depreciation is ok, but depreciation expectations may
delay exports and increase imports... Depreciation and appreciation
expectations might increase exports and delay imports..
Domestic inflation indeed increases depreciation and
expectations... The mechanism keeps exports competitive in the face of higher
domestic prices, to keep the relative exchange price of exports stable...
Though the original goal is to lower domestic inflation wages and interest
rates to make exports competitive... Inflation and depreciation mean an
uncompetitive domestic economy...
Economic growth depends on the expectations that the
available data creates. If the expectation is that there would be a rate-cut
cycle in the short run, people could delay demand and increase supply -which
could lower inflation expectations.." "In the long run, it would
increase demand and inflation expectations...
And, the
internet information has been handled at lightning speed, too... 133 becomes
126 and 2.8 becomes 7.6 ... This productivity growth is not reflected in supply
and prices or inflation... There is one more important thing ... These days
they use RFID chips to harass honesty... This is a real experience... Beware
telling the right..."
"Productivity and inflation have an inverse
relationship, meaning that higher productivity is associated with lower
inflation. This is because more productive workers produce more goods and
services at a lower cost, which increases supply and decreases prices."
In 2016 when Raghuram Rajan left the productivity
growth rate fell from 9.5% to 2.8% in 2023 continuously... I do not know if he
supported demon-etisation...? Probably not... he left inSep...2016..."
Education and knowledge lead to innovation... INDIA's
capital productivity also stands at the bottom... It simply means lower prices
and higher demand... The argument is that we are a labor-surplus economy
therefore we need to specialize in labor-intensive lines of production, but
capital-intensive investment means technology-rich and lower cost of production
and prices which could increase demand and price expectations... Saved labor
could be further used to increase production and lower prices using scale
economies... Education, technology, and skills could also be imported... which
are necessary for innovation and higher productivity, supply and higher demand
more profits... The budget should promise completely free education for the
poor with food... with only one Board with a uniform education code... If necessary
attract foreign investment...
This is one of the reasons for high inflation 10% and
15% inflation tells nothing if it is on a low base... It is the relative
experience of prices vs wages and real wages or savings ... We invest what we
save at the micro level... If growth is not happening for the unit or subject
what we could expect at the aggregate level... The economy needs excess supply
and more savings... more investment and demand... and more investment in
innovation...
"After 2014, however, real wages stagnated or
declined. In rural areas, agricultural labourers' wages dropped by -1.3 per
cent annually, and non-farm rural wages fell by -1.4 per cent annually during
the second term of the Modi government.13 Jan 2025"
"India's GDP per capita at PPP is $10,233, and Rs
8,50,000 doesn't show the actual case."
"जिसमे देश में महंगाई 5%
की दर से बढ़ रही हो 10 साल में 50%
सफाई हो रही हो मुद्रा के मूल्य में तो यह सप्लाई साइड प्रॉब्लम है... सही है...
क्यों की उत्पादकता दर के मालमे में भारत बहुत निचले पायदान पर है l
विकसित
देश की बराबरी करने में भारत को 150 साल लगेंगे l
वैसे
भी जहाँ तक बचत का सवाल है उसे दुगना होने में 14
साल लग रहे हैं, FD में l रियल
इंटरेस्ट रेट 5% के हिसाब से l""भारत
के स्टॉक मार्किट की स्तिथी और धरातल पर अर्थव्यवस्था की स्थिति वस्तुस्तिथि से
कोसों दूर है ऐसा होता रहे गा l लोगोंको तैयार रहना
पड़ेगा l"
"Hame ye samjna padega ki sarkar business karne ke liye
nahin hoti... kalyan ke liye hoti hain... Profit is not the motive of Govt...
Govt is extracting dividends from RBI... Never heard this news in comparison...
High taxes tell the real story... Dosare ke mehnat ke paise par ham ammeer
horahe hain, vo garib ho rahe hain..."
"When there are expectations of higher prices in
the future, it typically leads to a decrease in current supply on the supply
side, as producers tend to withhold some of their product to sell at a
potentially higher price later on, causing a shift leftward on the supply
curve; essentially, meaning less product is available in the market
currently."
"We want a budget that lowers inflation expectations and increases supply or we can say that one increases supply that lowers inflation expectations and increases savings... We do not want a budget that spends more we need a budget that lowers prices relative to income... and investment and more supply and get the expectations and feel of becoming rich overtime and spending... Lower inflation also increases savings..."
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