Portal:Business and economics/Selected article
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- January 1, 2007 - January 31, 2007
Keynesian economics (pronounced /ˈkeɪnzjən/), also called Keynesianism, or Keynesian Theory, is an economic theory based on the ideas of 20th century British economist John Maynard Keynes (pictured). Keynesian economics promotes a mixed economy, where both the state and the private sector play an important role. Keynesian economics differs markedly from laissez-faire economics (economic theory based on the belief that markets and the private sector operate well on their own, without state intervention).
In Keynes's theory, general (macro-level) trends can overwhelm the micro-level behavior of individuals. Instead of the economic process being based on continuous improvement in potential output, as most classical economists had believed from the late 1700s on, Keynes asserted the importance of aggregate demand for goods as the driving factor of the economy, especially in periods of downturn. From this he argued that government policies could be used to promote demand at a macro level, to fight high unemployment and deflation of the sort seen during the 1930s. A central conclusion of Keynesian economics is that there is no strong automatic tendency for output and employment to move toward full employment levels. This conclusion conflicts with the tenets of classical economics, and those schools, such as supply-side economics or the Austrian School, which assume a general tendency towards a welcome equilibrium in a restrained money-creating economy. In neoclassical economics, which combines Keynesian macro concepts with a micro foundation, the conditions of General equilibrium allow for price adjustment to achieve this goal.
- November 28, 2006 - December 31, 2006
John Davison Rockefeller, Sr. (July 8, 1839–May 23, 1937) was an American industrialist and philanthropist who played a pivotal role in the establishment of the oil industry, and defined the structure of modern philanthropy. In 1870, Rockefeller helped found the Standard Oil company. Over a forty-year period, Rockefeller built Standard Oil into the largest and most profitable company in the world, and became the world's richest man.
His business career was controversial. He was bitterly attacked by muckraking journalists; his company was convicted in the Federal Court of monopolistic practices and broken up in 1911. He gave up active management of Standard Oil in the late 1890s, while keeping a large fraction of the shares. He spent the last forty years of his life focused on philanthropic pursuits, primarily related to education and public health. He donated most of his wealth using multiple foundations run by experts. He was a devout Northern Baptist and supported many church-based institutions throughout his life.
Rockefeller may ultimately be remembered simply for the raw size of his wealth. In 1902, an audit showed Rockefeller was worth about $200 million, compared to the total national wealth that year of $101 billion. His wealth grew significantly after as the demand for gasoline soared, eventually reaching about $900 million, including significant interests in banking, shipping, mining, railroads, and other industries. By the time of his death in 1937, Rockefeller's remaining fortune, largely tied up in permanent family trusts, was estimated at $1.4 billion. Rockefeller's net worth over the last decades of his life would easily place him among the list of wealthiest persons in history. As a percentage of the United States economy, no other American fortune—including Bill Gates or Sam Walton—would even come close.
- October 21, 2006 - November 27, 2006
Green economics is an approach to economics in which the economy is considered to be a component of and dependent upon the natural world within which it resides and of which is it considered a part. It also takes the widest possible view of stakeholders of a transaction to include impacts, to nature, non human species, the planet, earth sciences, the biosphere. An, holistic approach to the subject is typical, such that economic ideas incorporate learning from other disciplines in a true transdisciplinary fashion, and important theories from feminist economics,post modernism, critical theory, ecology, international relations and peace, deep ecology, animal rights, social and environmental justice and the anti- globalisation in some cases and eco efficiency and participation in others as well as some localisation theories. Green Economics is different from but builds on some aspects of environmental economics and ecological economics.
Green Economics is based on three axioms:
- It is impossible to expand forever into a finite space.
- It is impossible to take forever from a finite resource.
- Everything on the surface of Earth is interconnected.
What defines green economists most clearly is the emphasis on the ecosystem as the right starting point for economics. This is in direct opposition to the neo-classical approach, which classifies the ecosystem as an "externality".
Subsidiary characteristics of green economics may include rejection of all analyses of factors of production or means of production that fail to clearly and fundamentally distinguish between living (nature, persons) and non-living (financial, social, instructional, infrastructural) roles in a productive process. Some have detailed critiques of "Fordism" (after Henry Ford) and "productivism", as best developed by Alain Lipietz of the French Greens.
All green economists regard "economic growth" as a delusion, since it contradicts the first Axiom (above). Growthism is an ideology, which disrupts and destroys growth in the life support capacity of the natural ecosystem: air and water filtering, food production, fiber growth. Green economists often characterize their work as "social ecology" and some may employ the Marxist analysis of means of production.
- September 14, 2006 - October 21, 2006
The Celtic Tiger is a nickname for the Republic of Ireland during its period of rapid economic growth between the 1990s and 2001 or 2002. The term is an analogy to the nickname East Asian Tigers applied to South Korea, Singapore, Hong Kong, Taiwan and other countries of East Asia during their period of rapid growth in the 1980s and 1990s. The Celtic Tiger or Celtic Tiger economy is often also called the The Boom or Ireland's Economic Miracle. Sometimes the Celtic Tiger moniker is also used when referring to continued or renewed Irish economic prowess subsequent to the aforesaid time period.
The original Celtic Tiger occurred in the mid 1990s and lasted until the worldwide economic downturn of 2001. During this time, the Irish economy grew by 5 to 6 percent annually, dramatically raising Irish living standards to equal and eventually surpass those of many states in the rest of Western Europe.
Although there are many causes for the Celtic Tiger, many economists give credit for Ireland's growth to a low corporate taxation rate (10 to 12.5 percent throughout the late 1990s) and subsidies called transfer payments from the more developed members of the European Union like France and Germany that were as high as 7% of gross national product (GNP).
As with any economic boom, there are consequences. Such were examples of problems that arose from Ireland's boom:
- Disposable income soared to record levels enabling a huge rise in consumer spending. It became a common sight to see expensive cars and designer labels around the nation's towns and cities.
- Unemployment fell from 18% in the late 1980s to 4.9% by the end of the boom and average industrial wages grew at one of the highest rates in Europe.
- Inflation regularly brushed 5% per annum, pushing Irish prices up to match those of the Nordic Europe. Groceries were particularly hard hit, prices in chain stores in the Republic of Ireland were sometimes up to twice those in Northern Ireland
- Public debt was dramatically cut (it stood at about 34% of GDP by the end of 2001) to become one of Europe's lowest, enabling public spending to double without any significant increase in taxation levels.
- A large investment in modernising Irish infrastructure and city streetscapes resulted from the new wealth - the National Development Plan led to large investments in road infrastructure and new transport services came on stream such as the Luas, the Dublin Port Tunnel and the extension of the Cork Suburban Rail. Local authorities were able to take the initiative to build new monuments such as the Spire of Dublin and enhance street appearance with repaving, new benches, trees, bins etc.
- May 31, 2006 to September 14, 2006
Scientific management or Taylorism is the name of the approach to management and industrial and organizational psychology initiated by Frederick Winslow Taylor in his 1911 monograph The Principles of Scientific Management. (Online version ).
'Taylorism is often mentioned along with Fordism, because it was closely associated with mass production methods in manufacturing factories. Taylor's own name for his approach was scientific management'. This sort of task-oriented optimization of work tasks is nearly ubiquitous today in menial industries, most notably in assembly lines and fast-food restaurants.'His arguments began from his observation that, in general, workers in repetitive jobs work at the slowest rate that goes unpunished. This slow rate of work (which he called "soldiering", but might nowadays be termed "loafing" or "malingering" as a typical part of a day's work), he opined, was a combination of the inherent laziness of people and the observation that, when paid the same amount, workers will tend to do the amount of work the slowest among them does. He therefore proposed that the work practice that had been developed in most work environments was crafted, intentionally or unintentionally, to be very inefficient in its execution. From this he posited that there was one best method for performing a particular task, and that if it were taught to workers, their productivity would go up.
While his principles have a certain logic, most applications of it fails to account for two inherent difficulties:
- It ignores individual differences: the most efficient way of working for one person may be inefficient for another;
- It ignores the fact that the economic interests of workers and management are rarely identical, so that both the measurement processes and the retraining required by Taylor's methods would frequently be resented and sometimes sabotaged by the workforce.
- May 1, 2006 - May 31, 2006
Generally, Risk Management is the process of measuring, or assessing risk and then developing strategies to manage the risk. In general, the strategies employed include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk. Traditional risk management focuses on risks stemming from physical or legal causes (e.g. natural disasters or fires, accidents, death, and lawsuits). Financial risk management, on the other hand, focuses on risks that can be managed using traded financial instruments. Intangible risk management focuses on the risks associated with human capital, such as knowledge risk, relationship risk, and engagement-process risk. Regardless of the type of risk management, all large corporations have risk management teams and small groups and corporations practice informal, if not formal, risk management.
In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled later. In practice the process can be very difficult, and balancing between risks with a high probability of occurrence but lower loss vs. a risk with high loss but lower probability of occurrence can often be mishandled.
- October 31, 2005 - May 1, 2006
In economics, the unit of account is a unit of measurement of market value. Goods for sale in a market are priced using a unit of account. In this manner the value is measured by the seller and expressed to the buyer. Contracts of credit or debt are denominated in a unit of account. In this manner the agreed value of the debt is measured, and the method of settling the debt is defined.
Whilst all market participants are free to use any unit of account that they prefer, most markets have only a few widely accepted units of account. For example in Japan the most universal unit of account is the yen.
It is generally assumed that a good unit of account is one that is stable. Just as a measuring stick used to measure length should itself be stable in length so to a unit of account used to measure value should itself be stable in value. However there are schools of economic thought that challenge this view point.
While it is most common to think of accounts in currency, it is possible to hold accounts in gold (as e-gold does) or options in various other commodities.
- August 29, 2005 - October 31, 2005
Foreign direct investment (FDI) is the movement of capital across national frontiers in a manner that grants the investor control over the acquired asset. Thus it is distinct from portfolio investment which may cross borders, but does not offer such control. Firms which source FDI are known as ‘multinational enterprises’ (MNEs). In this case control is defined as owning 10% or greater of the ordinary shares of an incorporated firm, having 10% or more of the voting power for an unincorporated firm or development of a greenfield branch plant that is a permanent establishment of the originating firm.
In the years after the Second World War global FDI was dominated by the United States, as much of the world recovered from the destruction wrought by the conflict. The U.S. accounted for around three-quarters of new FDI (including reinvested profits) between 1945 and 1960. Since that time FDI has spread to become a truly global phenomenon, no longer the exclusive preserve of OECD countries. FDI has grown in importance in the global economy with FDI stocks now constituting over 20% of global GDP.
- August 15, 2005 - August 28, 2005
Prasanta Chandra Mahalanobis (June 29, 1893–June 28, 1972) was an Indian scientist and applied statistician. He is best known for the Mahalanobis distance, a statistical measure. He did pioneering work on anthropometric variation in India.
His most important contributions are related to large scale sample surveys. He introduced the concept of pilot surveys and advocated the usefulness of sampling methods. He founded the Indian Statistical Institute on 17 December, 1931.
In later life, he contributed prominently to newly independent India's five-year plans starting from the second. His variant of Wassily Leontief's Input-output model was employed in the second and later plans to work towards rapid industrialisation of India and with his colleagues at his institute, he played a key role in developing the required statistical infrastructure.
He received one of the highest civilian awards Padma Vibhushan from the Government of India for his contribution to science and services to the country. He died on Jun 28, 1972, a day before his seventy-ninth birthday.
- August 9, 2005 - August 15, 2005
In many countries, the Yellow Pages refers to a telephone directory for businesses organized by the category of product or service. As the name suggests, they are usually printed on yellow paper.
Yellow Pages directories are usually published annually and distributed for free to all residences and businesses within a given coverage area. The majority of listings are in plain small black text. Yellow Pages publishers make their profits by selling special value-added features to businesses such as a larger font size for their listing, or an advertisement box next to the listings in a category. Since the mid-1990s, there has been a trend among Yellow Pages publishers to add four-color printing for some advertisements.
Many publishers now make their listings available on the World Wide Web, on "Yellow Pages" Web sites.
The information contained in the Yellow Pages is essentially a commodity, so publishers often engage in product differentiation tactics like bragging that their listings are more comprehensive or up-to-date. In 1999, a new tactic was pioneered by France Telecom's Pages Jaunes, which dispatched photographers to record nearly every possible view in front of nearly every address in certain French cities. Thus, French Yellow Pages users can see a photograph of a business along with its phone number and street address. In 2004, the search engine A9.com added a similar feature for many cities in the United States when it launched its Yellow Pages feature.
- August 6-9, 2005
In microeconomics, an indifference curve is a graph showing combinations of two goods to which an economic agent (such as a consumer or firm) is indifferent, that is, it has no preference for one combination over the other. They are used to analyse the choices of economic agents.
For example, if a consumer was equally satisfied with 1 apple and 4 bananas, 2 apples and 2 bananas, or 5 apples and 1 banana, these combinations would all lie on the same indifference curve.
The theory of indifference curves was developed by Edgeworth, Pareto and others in the first part of the 20th century. The theory was developed so that analysis of economic choices could be based upon preferences which can be observed and compared (ordinal utility), rather than the older concept of utility which was based on the unrealistic assumption that the satisfaction derived from economic choices could be measured (cardinal utility).
For a given pair of goods, many indifference curves can be drawn and placed next to each other. This representation is called an Indifference Map. The rational consumer is expected to prefer the higher or right most Indifference curve, since they represent combinations of goods providing higher levels of consumption.
Consumer theory uses indifference curves and budget constraints to produce consumer demand curves.
- July 2005-August 2005
Economic growth is the increase in the value of goods and services produced by an economy. It is conventionally measured as the percent rate of increase in real gross domestic product, or GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment," rather than growth of aggregate demand.
In the early modern period, some people in Western European nations began conceiving of the idea that economies could "grow", that is, produce a greater economic surplus which could be expended on something other than religious or governmental projects (such as war). The previous view was that only increasing either population or tax rates could generate more surplus money for the Crown or country.
During much of the "Mercantilist" period, growth was seen as involving an increase in the total amount of specie, that is circulating medium such as silver and gold, under the control of the state. This "Bullionist" theory led to policies to force trade through a particular state, the acquisition of colonies to supply cheaper raw materials which could then be manufactured and sold.
