Sunday, April 24, 2011

Volume 3 Issue 17: Two-Cent Economics

The World Economy, Simplified

With increasing volatility and connectivity, economics has become an increasingly important subject to understand. You typically hear laymen say that economics is about money, and any self-respecting economist would shudder at that suggestion.

Economics is about solving the problem of scarcity. Not so much solving, but providing the "most efficient" solution possible in allocating limited resources. Here is a somewhat interesting parable about how economics works, for those of you who are in need of basic knowledge on what economics is about.

Even if we do not go into detail on economic theory, knowing the basics on how economies function is becoming more of a necessity in the world today. We can no longer live under a rock, and tend to our farms, live on our harvest, and wake up tomorrow, thinking to ourselves, life goes on. This is simply because even in Malaysia, we can feel the effects of an earthquake that is more than 5,500 km away on the coast of Japan.

As I said, the world is increasingly connected and is getting smaller and smaller, more and more crowded. Hence, resources become even more limited, and as every second passes by, their allocation needs to be even more efficient. This is the world we live in today. So it is still not too late to learn about economics. Read this article today.

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