Posts Tagged ‘macroeconomics’

Economy has been the great subject these past weeks. The financial crisis has made us start to think if the model we’ve been pursuing was the correct one or if we should change to another one from now on. Many answers have came out from diverse people, to the ones proposing a closed market to develop all again, to other ones promoting capitalism with the adequate regulation, based on what Adam Smith proposed a little bit over 2 centuries ago.

In my opinion economy should keep going with the system we’ve been using, but based on a democracy and with close regulations in the places were markets can still fail because the distribution of information is not perfect.

But regardless of the macroeconomic results we will have this coming months I’m worried for the micro economic side of the matter. Microeconomics worry about what happens to us as individuals, so this is our personal state of affairs. How much money we earn, how much do we save, how much do we spend on cars and parties, etc. In the past years I’ve learned that Micro and Macro sometimes are not related. I’ve seen countries growing at 7% annually and yet not improving the quality of life of their people, so i wonder  if the opposite is also true.

In this rough times for Macroeconomics we for sure will have to cut off spending, some of us will lose our jobs (remember in macroeconomics losing your job will increase the rate from 4% to 4.000001%, but in Microeconomics it increases from 0% to 100%).   But life should not be that hard if we think we are capable of getting creative ideas. In this century brains are the ones that rule, so we need to dust them off and use them as much as we can. Some research shows that humans use just 5% of their brain capacity, in these times i guess we need to start trying to use 6, 7 or 8% so we can get and advantage.  Brains are dominating because talented people can build companies and millions of dollars in just a couple of years with ideas and the correct resources.

Back in the 19th century minds followed capital, now it’s the other way round. So in this times of crisis things aren’t that bad. We can’t lose it all, but we have our brains. We can come out with outstanding ideas to make new companies, associations or work clubs to produce nice ideas that will make our life easier. For example, Google has done this and followed a traditional business model. On the other hand Co-Working is doing another revolution and a business model, but with a amazing mission make people who work alone collaborate in a friendly environment.  And people are still creating new things. iPhone Apps are increasing in the itunes store, from loan calculators to tax paymentd widgets. Creativity is all around we just need to let the fear go out and start to think.

So if you feel this crisis is going to be bad, forget that! Start thinking in new ideas of how to improve the quality of life without increasing the cost to the people. How to make life easier with a marginal cost or how to help people collaborate to come out with new ideas and you will do well for sure. In this crisis we need to usea our processing power to   get out of it.

Economy is not based in capital or it’s based on BRAINS. And we all have one. So there is no excuse.     

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