Parabol

A parabol is very useful for analyzing minimization subject; apply it to anything from micro to milimicro; it can help you to find the minimum point after which the curve moves upwards.

On a curve it is not possible to find one point only so you need to have the tangent line through derivatives, which will give you the minimum. Think about y= xsquare + 2x + 1; the derivative will be 2x + 2 = 0 and the curve will be minimized at the point where it meets the tangent, which will be for x = -1.

Between Recession and Depression

In "Between Recession and Depression" it was discussed that this crisis can not be described as either. In time terms three years threshold is over; a double dip by definition means another three years at least. This takes us above depression rather than between recession.

How to define this is something, which needs to be thought, this blogger believes.

Maybe a new concept like stagflation needs to be defined. Inflation is part of the crisis in certain markets like commodities, however not in manufacturing as there are still idle resources.

Interest rates are still near zero levels. Monetary policy can not still be explained fully. Fiscally governnmets are at very high debt levels.

Macro and Micro

Macro economics is more art based to the contrary of micro economics.In micro you look at consumer's, and firm's maximization and minimization problems. Macro is the art. There is no rule, but the insight of politicians. Micro is the technical part.

How Far Is Economics From Being Universal?

Like music, maths, philosophy, science, economics has a universal character. Demand and supply are the same no matter where you go, which market or country or concept you apply it to. The rules are not as rigid as in maths, science but equally not as flexible as in music, philosophy. There is a certain level of objectivity but discretion as well, as in macroeconomics.

The Best Part of Economics

Micro side always functions, as it mainly focuses on firms and consumers. Fluctuating part of investment as a micro component is stable.

It is the macro level of investment and aggregation, which cause turbulence. As a solution, I believe there is a need for a mid level between micro and macro. Currently industial concept of looking at firms is helping that.

Components of Economics

What is economics made of?

To measure this we have the GDP made of consumption, investment and government spending on the left side of the equation equalling to consumption, saving and taxation. When the economy becomes open, then you get import and export added to that.

As a pre globalization concept, is there a need for a new measure called globalization GDP maybe?