What shape the world will be in: An Interesting observation

An interesting observation by a corporate economist on the path that recession is expected to take- Growth would dip followed by recovery, the after effects of the recent monetary easing, implying a familiar ‘U’ shape.
However other anticipated patterns resemble other letters of the alphabet- Optimists apprehend the recovery path to look like ‘V’ implying a quick return of confidence and credit; on the other hand it could be a ‘W’ shaped double dip. Pessimists fear the pattern of the future to resemble an ‘L’, implying a big dip and then a ride along the bottom. A gloomy frame of mind would rather think of a back slash: ‘\’ , displaying a relentless decline. Other options could be a downward spiral, shaped like ‘S’ or ‘Z’.
The bottom line is that the next year is different from an up-down business pattern which we saw in the last three decade, and that the range of alternative options as provided by alphabet economics shape the range of policy prescriptions that the policy makers may opt, for driving the economy out of recession.

Source: http://www.economist.com/

Richa Shukla
Globsyn Business School

Data say enough to silence any economic doomsayer

The world should not be worried about India’s medium to long term prospects as the nation’s economic fundamentals are sound and robust-

• India not a large borrower: $15 billion borrowing for a country with a $1 trillion GDP is not much
• Strong savings rate of 34.8%
• Investment rate of 35.9%
• Incremental Capital output ratio of 4% (better than China, 4.3%)
• Growth in export of 20%
• Strong growth in foreign exchange reserves at over $308 billion
• As per the projections, by 2022, India could be the world’s largest pool of trained manpower and leaders in industry and commerce, accounting for 10% of the world trade.

Source: The Chartered Accountant (Journal of the ICAI)

Richa Shukla

Globsyn Business School

What economics can?

• It creates awareness of your power to think like an economist
• You start behaving rationally…hey its not that you were irrational, but yes the subject can sharpen your rational edge
• You start analyzing the way you behave and the way others behave in a social environment
• Develops in you an art to visualize each area of life differently and analytically
• Gradually you try to simulate the outside world in the economic brain of yours for capturing its essence and developing new frameworks with new perspectives.

Richa Shukla

(Globsyn Business School)