Articles on Managerial Economics

Managerial Economics - Introduction

Managerial Economics can be defined as amalgamation of economic theory with business practices so as to ease decision-making and future planning by management

Scope of Managerial Economics

Managerial Economics is different from microeconomics and macro-economics. Managerial Economics has a more narrow scope - it is actually solving managerial issues using micro-economics.

Nature of Managerial Economics

Managers study managerial economics because it gives them insight to reign the functioning of the organization. Lets understand the features of managerial economics in detail.

Managerial and Micro Economics

Micro Economics is a broader concept as compare to Managerial Economics. Managerial economics can be perceived as an applied Micro Economics.

Principles of Managerial Economics

Economic principles assist in rational reasoning and defined thinking. They develop logical ability and strength of a manager. Some important principles of managerial economics are explained in detail

Role of a Managerial Economist

A managerial economist helps the management by using his analytical skills and highly developed techniques in solving complex issues of successful decision-making and future advanced planning

Consumer Demand

Learn in detail about the concepts of Consumer Demand, Demand Curve, Demand Schedule, Demand Function, Law of Demand and Exceptions to the Law of Demand

Price Elasticity of Supply

This article explains the concept of elasticity of supply. It then discusses on basic concepts like its relation with the supply curve. Calculations and examples have been provided to aid understanding.

Determinants of Price Elasticity of Supply

This article explains the determinants of price elasticity of supply. It also explains the reasoning behind why these determinants play an important role.

Marketing and Seasonal Demand for Goods and Services

This article examines the concepts of seasonal demand, elasticity of seasonal demand, and the way in which marketers worldwide are orienting themselves to these concepts. The key themes in this article are that as societies worldwide become consumerist, marketers too have begun to imitate the west in Festival discount sales, suit their campaigns to seasonal variations in demand. Having said that, this article also considers the global, local, and Glocal strategies that are needed to succeed in markets worldwide.

Introduction to Business Economics

This introductory module on business economics sets the context for further discussion on this topic. The key themes that are central to business economics are discussed in brief. Further, there is a discussion on how students and professionals can benefit from this module on business economics.

What is Fractional Reserve Banking ?

We often hear the term fractional reserve banking in the business jargon. This article explains the term and the concept of fractional reserve banking with examples and analyzes the advantages and disadvantages of fractional reserve banking.

Global Currency Reserve System

This article discusses what is meant by the term global reserve currency and the primacy of the USD (United States Dollar) as the reserve currency. The article argues that the US has had exorbitant privilege as the USD is the reserve currency and hence, the recent moves to trade in Chinese Yuan by some countries are to be welcomed.

What is Capital Account Convertibility ?

This article discusses the terms capital account convertibility and current account convertibility by examining the key aspects of each and by analyzing some real world examples. The key theme in this article is that emerging economies must decide on convertibility only according to their internal assessment and not because of external pressure.

The Rise of the Informal Economy

The biggest beneficiaries of globalization have been the informal sector and the unorganized economy that has grown to a size that is no longer possible to ignore it or dismiss it as being peripheral. This article analyzes the emergence of the informal economy and suggests that the policymakers and the governments of the world have to start the process of engagement with the informal sector, which estimates suggest would overtake the formal economy by 2020.

Currency Wars and Financial Crisis

The recent wild gyrations and fluctuations in the values of many currencies have experts fearing a protracted round of currency wars among the countries in the global economy. This article discusses the implications of such currency wars and the consequences they have for the nascent economic recovery. The key theme in this article is that currency wars do not benefit the global economy and hence, all attempts must be made to recover from the global economic crisis instead of adopting a beggar thy neighbor attitude.

Future of Energy and its Implications

This article discusses the current oil based paradigm of industrial civilization by assessing its importance and by examining the recent trends. The key theme in this article is that we need to move beyond oil and the future of energy is discussed as well. This article makes a strong case for transitioning to a post petroleum world when we still have the time instead of risking the collapse and disintegration of society.

Energy Transition and Growth

This article discusses the need for finding new energy sources to sustain ourselves and grow our way out of the recession. The key theme in this article is that like humans, societies need energy to grow and sustain themselves and when energy is scarce, the alternatives must be found so that we remain fit and healthy.

Tough Times Ahead for the Corporates

This article discusses three factors that point to tough times for the corporates in the next year or so. The key theme in this article is that the maturing of debt, low growth and rising costs, and the buyout of the corporates by Private Equity firms would create a perfect storm of economic conditions that would impact their employees and shareholders.

Role of Venture Capitalists

This article discusses the role of the venture capitalists and angel investors in incubating new ventures and shaping the destinies of economies. The key theme in this article is that venture capitalists are crucial to the processes of creative destruction that are inherent to capitalism.

New Immigration Policies in the West

This article discusses some of the emerging anti-immigration laws in the west in response to the global economic crisis. The key theme in this article is that the flat world of globalization is giving way to a building of imaginary walls that restrict global trade and free movement of people and hence, all of us must be on the lookout on how we would be impacted by these trends.

Economic Benefits of Immigration and how to Manage Flow of Migrants

This article examines the recent surge in migration as can be seen from the unprecedented flows of refugees into Europe. The article debates both sides of the debate by analyzing the advantages and disadvantages of migration. Next, an on balance assessment is made along with some possible solutions to the issue. The key theme in this article is that there needs to be hardnosed and rational approaches mixed with humanitarian impulses to ensure a just solution to the problem of refugees.

Employment Rules and Tax Laws

This article discusses how the macro environmental policies related to labor laws and tax rules impact the managers and working professionals in different countries across the world.

What is Deregulation ?

This article explains what is meant by deregulation and discusses how it works. In addition, this article also examines the mostly positive aspects of deregulation for businesses whereas for the consumers, there are advantages and disadvantages as well.

The Impact of Political Stability

This article discusses the reasons why businesses like political stability and macro environmental stability and hate uncertainty. The key theme in this article is that capital is country and region blind and migrates and flows to wherever it is welcome. The article cites the contrasting examples of China and India to highlight the need for political stability for businesses.

What is Inflation

This article discusses what is meant by inflation and how it affects consumers, professionals, and businesses and economies. The key theme in this article is that inflation is a growth killer as well as a savings reducer in addition to being a depreciator of investments and expenditure. This is the reason why central banks often have a primary mandate of tackling inflation.

Gloomy Outlook for the Real Estate Sector

This article discusses the slump in the real estate sector in many countries with a specific focus on the Asian economies. The reasons for the bust in the real estate sector in these countries are discussed.

How Rising Oil Prices Threaten Economic Growth and Impact Businesses and Managers

This article discusses the key aspects of how rising oil prices threaten economic growth and lead to all round inflation. The key theme in this article is that virtually every economic activity in our modern civilization depends on oil and hence, we cannot ignore the centrality of oil to our modern existence. The other key theme in this article is that we must transition to an alternative energy source while we have the time to do so.

Will the Republicans Force the United States to Default in the Next Few Months ?

This article discusses the approach of the Republican Party in the United States to force the Obama administration to agree to cut spending on social services in lieu of their cooperation on raising the debt limit. The key theme in this article is that both the worst-case scenario and the best-case scenario are dangerous for the markets and hence, professionals and investors must prepare accordingly.

Conflict between Reformers and the Populists in Developing Countries

This article discusses the ideological conflict between the reformers and the populists in developing countries like India that has seen either camp resist the moves of the other in a seesaw battle between neoliberalism and socialism. The key theme in this article is that this ideological clash mirrors global trends and given the flux that the global economy finds itself in now, it would be some years before either ideology is deemed to work for the developing countries.

Rekindling the Animal Spirits in the Global Economy to Rejuvenate Growth

This article discusses the metaphor of the Animal Spirits that is used to characterize the economies of the world and how using this metaphor we can understand the wild swings and the gyrations of the markets. The key theme in this article is that the financial markets operate like a wild beast with its manias, panics, and crashes and that the markets when left to themselves often correct themselves to arrive at equilibrium.

Is Less Government the Answer in Market Economies or the Other Way Around ?

This article introduces the readers to the debate over whether free markets must be left to themselves without governmental interference or whether governmental control over the economy is needed. The key theme in this article is that both governments and the private sectors in market economies have to work together to actualize social welfare and social justice. The article makes a case for separating the bees from the locusts and taking the best aspects of capitalism and leaving out the negative aspects.

Are Asian Economies headed for a Repeat of the 1997 Asian Financial Crisis?

This article discusses the question as to whether the Asian economies are going to witness a repeat of the 1997 financial crisis. The key theme in this article is that the same set of policies and conditions that existed then is now repeating themselves now and the policymakers in these countries seem to pursue these policies without a thought for the ordinary citizens of these countries.

The Age of Austerity in the West in Response to the Global Economic Crisis

The good times are over for many people in the West and all over the world. The gloomy economic conditions have meant that governments are cutting down on social spending and on basic services and for a population that took these for granted, it is becoming difficult to adjust to the harsh realities. This is the key theme that is discussed in this article.

What Is Hyperinflation ?

This article provides an introduction to the concept of hyperinflation. It also provides a visual description of what a world reeling with hyperinflation looks like.

Famous Cases of Hyperinflation

This article provides a historical background of hyperinflation. It mentions some of the prominent events in history and how hyperinflation could have possibly caused those events.

Relationship Between Inflation and Government

This article discusses the relationship between inflation and government policy. The debate as to whether government is responsible for rising inflation is addressed in this article.

Definition of Inflation

This article explains how a slight change in the definition of inflation has completely changed its meaning. This point is proved with arguments as well as with an example.

Why Does the Definition of Inflation Matter?

This article explains the reasons as to why the wrong definition of inflation is harmful. It list down the various means by which the general population stands to lose thanks to this definition confusion.

Price Fixing: A Flawed Approach

This article explains the fallacy of the concept of price fixing. It explains with the help of an example as to why price controls are an inappropriate solution.

How Inflation Is Currently Measured?

This article explains the process that is commonly followed while creating a price index that is used for the purpose of measuring and monitoring inflation.

Problems: Measurement of Inflation

This article lists down all the issues that are faced in the process of inflation measurement. This article also discussed why the current system of measurement is need of an overhaul.

The Problem with Comparing Inflation Numbers

This article explains how the numbers derived by measuring inflation are extremely limited in their use despite the humungous resources that they consume.

How Should Inflation Be Measured?

This article provides information about a proposed system that can be used to measure inflation instead of the current system which consumes humungous resources and provides substandard information.

Inflation: A Hidden Tax

This article explains how inflation is a means of taxation. The covert nature of this tax has also been explained in this article.

Inflation: A Hidden Tax (Part-2)

This article discusses some of the common policies and causes that lead to inflation as an unintended consequence.

Myth: Inflation and Scarcity

This article explains the difference between scarcity and inflation. It also provides arguments as to why scarcity is distinctly different from inflation.

Inflation and Wealth Redistribution

This article explains how inflation causes redistribution of wealth and purchasing power. The article also explains why inflation is essentially the same as a regressive tax system.

The Disturbing Wealth Gap and Why it Matters ?

This article discusses the issue of Wealth Inequality in the United States and in the World. It firstly explains how controversial tax policies create and maintain this inequality. It also explains why politicians are unwilling to do anything about it.

Is A World Without Inflation Possible

This article provides a narrative on the time periods in history where there was no inflation for extended periods of time. It explains how those monetary systems were different as compared to the system that we have today.

What is Meant by Inclusive Growth and Why it is Important ?

This article examines what is meant by inclusive growth and why it is important for countries to actualize such inclusive growth. The key theme in the article is that a middle ground has to be found between growth that benefits only the top 1% and at the same time, there should not be a scenario where populism prevails leading to bankruptcy and insolvency of the governments.

Importance of Infrastructure in a Nation’s Development

This article discusses the importance of infrastructure in a nation’s development. The various components of such infrastructure including roads, ports, and airports along with human resources and the necessity of urban planning are all examined in detail. The key themes in this article are that unless nations invest in their infrastructure, they would be unable to grow faster and that there are no shortcuts in this process and no substitutes for such investments.

Evaluating the Pros and Cons of Supply Side Economics

This article is about evaluating the effectiveness of supply side economics in tackling the macroeconomic objectives. This article starts off by defining what supply side economics is and the alternatives to it. The relative merits and demerits of supply side economics as opposed to the monetarists and fiscal policy theorists are discussed. Supply side economics has been the primary driver of growth during the last two decades of the 20th century and was responsible for the high rates of growth that the US economy witnessed in these years.

Pros and Cons of the Uber Economy

This article examines the pros and cons of the emerging freelance or the gig work based economic model which is also known as the Uber economy so called since the ride sharing app based car service, Uber is the pioneer and the trendsetter in this new paradigm. The key themes in this article are that while the Uber economy represents an exciting new model of work, the rights of the workers have to be protected as well and hence, the onus is on the government to take steps in this direction.

Ubernomics: The Questionable Business Model of a Unicorn

In this article, the unethical practices regarding Uber’s business model have been exposed. It explains why Uber is not a technology company but rather a company which is built on evasion of regulation.

Why Savers are Losers in the 21st Century ?

This article explains why savers lose value in the modern economy. It explains the fiat economy system. It also explains how gold and silver provide a defensive hedge against such inflation.

Top Five Factors That Spur Economic Growth

This article lists down some of the factors that have been known to create economic growth. It explains with examples how economic growth can be achieved. It also explains why it is not achieved.

Overview of the Sharing Economy and the Emerging World of Work

This article examines the new economic model of the Sharing Economy through analysis of how companies such as Uber, AirBnB, Upwork, and Task Rabbit work. After that, the implications of this sharing economy for the clients, the freelancers, and the companies themselves are discussed. The key theme in this article is that this new model of collaborative capitalism and the emerging world of work need to be understood by all stakeholders to actualize successful outcomes for everyone.

The 10 Trillion Dollar Sovereign Wealth Fund Game!

This article provides more information about sovereign wealth funds. It explains how these funds derive their money and how they invest it. It also lists some of the biggest sovereign wealth funds in the world.

The Great Chinese Debt Binge

This article introduces the debt position of China. It explains how China has borrowed unprecedented levels of money and how this is bound to lead to a catastrophe sooner or later.

Soak the Middle Class

This article explains how the middle class has been the beneficiaries of every program launched by the American government. It also explains why they must be taxed to introduce parity in the system.

Small Bribes that Lead to Big Losses

This article explains the significant cost of small bribes. It explains why distinguishing between corruption is a futile activity and why corruption must be avoided in all its forms.

Economics of Low Cost Airlines

This article explains how budget airlines make money. It explains the economically superior model that allows budget airlines to be profitable even though a large number of full-service airlines are loss making.

The Labor Theory of Value

This article explains the fundamental concepts behind the labor theory of value. It describes how this theory differs with our modern theories. It also tells how the belief in this theory was responsible for the establishment of socialism in several countries.

What Happens When Countries Do Not Pay Back Their Debt?

This article explains the difference between corporate default and sovereign default. It also lists the effects that are commonly faced by economies once the government has defaulted on its debt.

The Economics of Biofuels

This article explains the economics of biofuels. It lists down the advantages and disadvantages of using biofuels over fossil fuels. It also explains why technology related to biofuels still needs to be developed further.

Companies Need to Create Long Term Value to Survive the Uber Competitive Market

In these times of 24/7 real time modes of operation, businesses might easily succumb to the temptation to live for each quarter instead of years or decades. However, basic management and capitalist theory states that longer term value creators think in terms of decades rather than years. Thus, in this article, we revisit some of the principles that underlie longer term value creation and explain how you, the reader, who is the business leader of tomorrow to focus on longer term value creation instead of being blindsided by short term thinking.

The Business Case for Immigration: How Immigration and Immigrants Help the Economy

Immigration and Immigrants are being viewed negatively worldwide. However, there is a strong business case to be made for immigration. In countries with declining populations, immigrants can help make up the gap between demand and supply of labor. Moreover, highly skilled immigrants can add significant value at the higher end of the spectrum. Thus, this article makes a strong case for a rational debate on the costs and benefits of immigration and how business leaders can help in this respect.

The Left Wing Theory of Economic Growth

This article explains the difference between left wing and right wing economics. It also explains the left wing’s economic viewpoint in detail. Lastly, it lists the flaws in this viewpoint.

Saving vs. Spending

This article contrasts the two different approaches to economic growth. The savings, as well as the spending approach, have been explained. The superiority of the saving approach has been described in this article.

Quantitative Easing and Income Inequality

This article explains the effects of quantitative easing on wealth inequality. This article explains how quantitative easing has affected the different strata of society. It explains how the gap between the rich and the poor has been widened by this policy.

The Liquidity Trap

This article explains the concept of the liquidity trap. It explains how the liquidity trap was a discredit economic concept. However, the increasing evidence in favor of this concept has made it relevant once again. The symptoms and effects of the liquidity trap have also been mentioned in detail.

How Venture Capital is Destroying the Economy?

This article explains how venture capital is working against the interests of the economy as a whole. It also explains how venture capitalists create hype to cash out of the underlying business at a profit.

Is Deflation Really Bad for the Economy?

This article explains the concept of good deflation. It also explains why deflation need not be bad for the economy. Lastly, the conditions required for deflation to be favourable for the economy have been explained in this article.

How the Law of Diminishing Returns Helps Explains the Contemporary Global Economy

This article explains the Law of Diminishing Returns on Capital and how it helps us understand the Contemporary Global Economy. Using theories and economic concepts, we argue that the diminishing returns from capital are the reason why there is so much speculation and so little job creation. We call for Innovation and a Just Income and Wealth Distribution so that the victims of the Diminishing Returns also benefit.

What is Supply Side Economics and How it Failed to Foster Equitable Economic Growth

This article uses economic theories and examples from the real world to explain what Supply Side Economics is and how it has failed as an economic paradigm. We also discuss how Trickle down Economics has led to widening economic inequities and also illustrate the need for moving beyond the Neoclassical Economic theories. We argue that the ongoing Fourth Industrial Revolution needs a change in our thinking and paradigms.

Is the McKinsey Model of Internal Democracy Worth Emulating by Other Corporates?

This article discusses the McKinsey Model of Internal Democracy using Organizational Behaviour and Organizational Development theories. We explain how McKinsey lets its partners choose the CEOs and whether this model can be emulated by other corporates. We list the pros and cons of Internal Democracy and argue that other corporates can follow this model after adequate Due Diligence.

What are Monopolies and How They Help and Harm the Economy and Their Regulation

This article uses economic theories and concepts along with real world examples of Reliance and Adani to illustrate how monopolies are bad for economies and though they have some benefits, there is a need to regulate them. Using classical economic terms and the examples of India in the post liberalization period, we argue against monopolies and call for a restoration of the economy to the theoretical economic principles.

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Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to and the content page url.