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THE LAW OF DIMINISHING RETURNS : The origin

newuser — Thu, 17 May 2012 11:40:19 +0000

The `law of diminishing returns' plays so large a part both in the theory of rent and the theory of population as they are now taught, that we should naturally expect to find it promulgated both by James Anderson, the reputed anticipator of Ricardo, and by Malthus in his Essay on the Principle of Population. In this expectation, however, we should be disappointed. Anderson, far from teaching the law of diminishing returns, was one of those enthusiastic agriculturists who have a hazy belief that an increase of the labour employed upon the soil will always bring in a proportionate, if not more than a proportionate, increase of returns...click here to read ahead

philip kotler

Managing firms throughout the business cycle: The Davis Way!

maddy — Sat, 05 May 2012 11:40:02 +0000

The first decade of the 21st century has been a rollercoaster ride for economic activity. Business confidence was high at the start of the millennium. This was particularly fuelled by the growth of the internet as a means of buying and selling. A lot of companies have developed websites and there has been a rapid increase in online purchasing. during 2008/9 the rapid growth of world markets came to a halt. Many of the problems stemmed from banks lending money to risky borrowers. When some of these failed to pay back this led to a rapid loss of confidence in the banking system. Banks became reluctant to lend. The Davis Service Group provides textile maintenance services in the UK and Europe. This includes linen hire, work-wear rental, dust control mat, laundry and washroom services. The Group consists of two main operating companies each with its own directors and executive team. These two operating companies delegate responsibility and authority to profit centres throughout the Group. Providing essential services enables the company to grow when economic activity is expanding in its various markets. Read more...

Do Inefficient Stock Markets Drive Bad Corporate Governance?

maddy — Wed, 25 Apr 2012 11:40:10 +0000

One of the major accomplishments of recent corporate governance research has been to expose the risks confronted by minority shareholders in public companies around the globe. Corporate ownership structures such as pyramids, business groups, and dual class shares leave control in the hands of a limited set of blockholders – exposing minority investors to potential expropriation. But why do minority shareholders continue to hold stock despite the risk of expropriation by controlling shareholders?

Costs Are Cool: The Strategic Value of Economic Clarity

admin — Wed, 18 Apr 2012 23:40:03 +0000

For most nonprofit organizations, the art of making tradeoffs is a condition of survival as well as a key element of success. With limited means to address substantial social challenges, nonprofit leaders constantly make choices about the most effective way to allocate available resources among competing priorities. Information about revenues (in the form of donations, grants, and earned income) is usually fairly solid, organizational knowledge about costs tends to be weak. This is particularly the case when it comes to the true, all-in costs of providing services, running programs and otherwise operating the organization. Lacking this information, nonprofit executives often end up having to make important resource-related decisions on the basis of intangibles such as intuition, the skills and knowledge of the program staff, or the preferences and inclinations of the organization’s funders. Read more...

World Markets Vs. Economy

vicky113 — Sat, 07 Apr 2012 11:40:23 +0000

Although economics has many facets, the field is unified by several central ideas. In this article, we will take a closer look at Ten Principles of Economics. There is no question as to what an economy is. Whether we are talking about the economy of Los Angeles, England, or Australia, a healthy economy is based on several distinct variables. Because the behaviour of an economy reflects the behaviour of the individuals who make up the economy. Principle 1: People Face Trade-offs "There is no such thing as a free lunch." To get one thing that we like, we usually have to give up another thing that we like. Nonetheless, acknowledging life's trade-offs is important because people are likely to make good decisions only if they understand the options that they have available. Principle 2: The Cost of Something Is What You Give Up to Get It. Because people face trade-offs, making decisions requires comparing the costs and benefits of alternative courses of action. In many cases, however, the cost of some action is not as obvious as it might first appear. Principle 3: Rational People Think at the Margin Economists normally assume that people are rational. Rational people systematically and purposefully do the best they can to achieve their objectives, with the opportunities they have. Michael Leary of Apex Investment Services says that rational people know that decisions in life are rarely black and white but usually involve shades of gray. Economists use the term marginal changes to describe small incremental adjustments to an existing plan of action. Principle 4: People Respond to Incentives An incentive is something that induces a person to act. Because rational people make decisions by comparing costs and benefits, they respond to incentives. You will see that incentives play a central role in economics. Incentives are crucial to analyzing how markets work. For example, when the price of an apple rises, people decide to eat more pears and fewer apples because the cost of buying an apple is higher. At the same time, apple orchards decide to hire more workers and harvest more apples because the benefit of selling an apple is also higher. When analyzing any policy, we must consider not only the direct effects but also the indirect and sometimes less obvious effects that work through incentives. If the policy changes incentives, it will cause people to alter their behaviour. As we go about our lives, many of our decisions affect not only ourselves but other people as well. Now we will discuss the next three principles which examine with how people interact with one another. Principle 5: Trade Can Make Everyone Better Off It is easy to be misled when thinking about competition among countries. Trade between the United States and Japan is not like a sports contest in which one side wins and the other side loses. In fact, the opposite is true: Trade between two countries can make each country better off. By trading with others, people can buy a greater variety of goods and services at lower cost. Countries benefit from the ability to trade with one another. Trade allows countries to specialize in what they do best and to enjoy a greater variety of goods and services. The Japanese, as well as the French and the Egyptians and the Brazilians, are as much our partners in the world economy as they are our competitors. Principle 6: Markets Are Usually a Good Way to Organize Economic Activity At first glance, the success of market economies is puzzling. After all, in a market economy, no one is looking out for the economic well-being of society as a whole. Free markets contain many buyers and sellers of numerous goods and services, and all of them are interested primarily in their own well-being. Yet despite decentralized decision making and self-interested decision makers, market economies have proven remarkably successful in organizing economic activity in a way that promotes overall economic well-being. Principle 7: Governments Can Sometimes Improve Market Outcomes If the invisible hand of the market is so great, why do we need government? One reason we need government is that the invisible hand can work its magic only if the government enforces the rules and maintains the institutions that are key to a healthy economy. Most important, markets work only if property rights are enforced. A farmer won't grow food if he expects his crop to be stolen; a restaurant won't serve meals unless it is assured that customers will pay before they leave; and a music company won't produce CDs if too many potential customers avoid paying by making illegal copies. We all rely on government provided police and courts to enforce our rights over the things we produce - and the invisible hand counts on our ability to enforce our rights. How individuals make decisions, and how people interact with one another make up the many variables of "The Economy." Principle 8: A Country's Standard of Living Depends on Its Ability to Produce Goods and Services The differences in living standards around the world are staggering. In 2007, the average American had an income of about $37,500. In the same year, the average Mexican earned $8,950, and the average Nigerian earned $900. Not surprisingly, this large variation in average income is reflected in the quality of life. Citizens of high-income countries have more TV sets, more cars, better nutrition, better healthcare, and a longer life expectancy than citizens of low-income countries. What explains these large differences in living standards among countries and over time? The answer is surprisingly simple. Almost all variation in living standards is attributable to differences in countries' productivity- the amount of goods and services produced from an employee's time. In nations where workers can produce a large quantity of goods and services per unit of time, most people enjoy a high standard of living. Similarly, the growth rate of a nation's productivity determines the growth rate of its average income. Principle 9: Prices Rise When the Government Prints Too Much Money In Germany in January 1921, a daily newspaper cost 0.30 marks. Less than 2 years later, in November 1922, the same newspaper cost 70,000,000 marks. All other prices in the economy rose by similar amounts. This instance is one of history's most stunning examples of inflation. What causes inflation? In almost all cases of large or persistent inflation, the culprit is growth in the quantity of money. When a government creates large quantities of the nation's money, the value of the money falls. In Germany in the early 1920s, when prices were on average tripling every month, the quantity of money was also tripling every month. Although less dramatic, the economic history of the United States points to a similar conclusion: The high inflation of the1970s was associated with rapid growth in the quantity of money, and the low inflation of the 1990s was associated with slow growth in the quantity of money. Principle 10: Society Faces a Short-Run Trade-off between Inflation and Unemployment Although a higher level of prices is, in the long run, the primary effect of increasing the quantity of money, the short-run story is more complex and more controversial. Most economists describe the short-run effects of monetary injections as follows: * Increasing the amount of money in the economy stimulates the overall level of spending and thus the demand for goods and services. * Higher demand may over time cause firms to raise their prices, but in the meantime, it also encourages them to increase the quantity of goods and services they produce and to hire more workers to produce those goods and services. * More hiring means lower unemployment. This line of reasoning leads to one final economy wide trade-off: a short-run trade-off between inflation and unemployment. Although some economists still question these ideas, most accept that society faces a short-run trade-off between inflation and unemployment. This simply means that, over a period of a year or two, many economic policies push inflation and unemployment in opposite directions. This short-run trade-off plays a key role in the analysis of the business cycle-the irregular and largely unpredictable fluctuations in economic activity, as measured by the production of goods and services or the number of people employed. Click here to download the article

Black Tuesday

maddy — Sat, 10 Mar 2012 23:40:17 +0000

On Tuesday October 29th, 1929, Wall Street witnessed a 13% decline in the Dow Jones, an episode that became known in financial mythology as “Black Tuesday.” It is generally recognized that Black Tuesday was the beginning of the Great Depression. Between early September and the end of October 1929 the market lost a total of 40% in less than 8 weeks. In reality Black Tuesday was just the end of the beginning of the crash on Wall Street.

As you can see from the graph below, the market continued to fall for several years after Black Tuesday. By the end of the slide some pundits conjectured that the market might actually go to zero. From its high of 386.10 in September ’29 to its low of 40.60 on July 29, 1932, the market had lost a total of 89%! Click here to download the article....

Analysis of News’ Impact on Stock Prices

maddy — Tue, 28 Feb 2012 11:40:08 +0000

According to the Efficient Market Hypothesis stock prices should be affected by the release of new information. In this paper we analyse the effect of newspapers on stock prices provided that the newspapers do not have access to private information. This research paper was published as University essay from Handelshögskolan i Stockholm. To find an answer to this question, a random sample of stocks from OMX Stockholm Stock Exchange have been chosen. Stock data has been gathered together with articles about the stocks in the sample. The articles have been classified as positive, neutral and negative. That information have been plugged in a set of variables and then regressed with the daily abnormal returns of the stocks. Empirical data shows that newspapers have an overall significant effect on stock’s abnormal returns and therefore over stock prices. Read more...

efficient market hypothesis case study

Better management of food economy is key for long-term food price stability.

admin — Tue, 14 Feb 2012 23:40:11 +0000

Inflation in India, essentially the food price inflation, is rising at a fas t clip, threatening to derail the growth momentum and triggering a rise i n the interest rate. The situation is quite alarming. For the rich and upper middle-class people, this is not a big issue as they spend a very small proportion of their income on food . But for the poor and even for a section of the middle-class, this has really created havoc. Some people spend even up to 80% of their income on food. Read more....

Golden Rice: Case Study

admin — Thu, 09 Feb 2012 09:42:13 +0000

The World Health Organization (WHO) estimates that vitamin A deficiency affects 230 million children worldwide, and at least one million children per year are dying of diseases related to this deficiency. Ingo Potrykus and his collaborator Peter Beyer, with financial support from the Rockefeller Foundation, led the effort to develop a variety of rice that contains beta-carotene, the plant pigment that is the precursor of Vitamin A. This rice, called "golden" rice because the inserted beta-carotene turns the grain a golden yellow color, could supply enough beta-carotene in a typical serving to supply 10% of the daily requirement for Vitamin A. “It is ironic that some of the worst concentrations of xeropthalmia and blindness due to Vitamin A deficiency occur in populations surrounded by abundant sources of the vitamins and minerals in local vegetables and fruits, yet no country has yet mounted a successful campaign to solve the Vitamin A problem in this way.” Dr. Nevin Scrimshaw, 1991 Laureate of the World Food Prize For more information on this topic click here http://www.biotech.iastate.edu/case_studies/golden_rice/ http://www.public.iastate.edu/~ethics/GoldenRiceCaseStudy.pdf http://www.agbioforum.org/v10n3/v10n3a04-unnevehr.htm http://lsr.nellco.org/cgi/viewcontent.cgi?article=1006&context=piercelaw_facseries http://www.etcgroup.org/upload/publication/305/01/com_goldenrice.pdf http://www.goldenrice.org/PDFs/Philippines_GR_Food_Policy_2004.pdf

Golden Rice

golden rice case study

Case Study on Global Warming

admin — Wed, 08 Feb 2012 11:44:29 +0000

The security of individuals, communities, nations, and the entire global community is increasingly jeopardized by unpremeditated, non-military environmental threats. These threats are self-generated: we perpetrate them on ourselves, by fouling our air and water, and overharvesting our land. One of the causes of global warming, or more generally, global climate change is increased atmospheric CO2 that comes from anthropogenic sources. Human activity is increasing the release of CO2 into the atmosphere by burning fossil fuels, burning forests, deforestation and destruction of the soil, along with other activities. For more information on this topic click here http://www.thw.coventry.sch.uk/Geography/Global%20warming%20causes%20and%20effects.pdf http://www.slideshare.net/mrcornish/arctic-case-study-global-warming http://wattsupwiththat.com/2011/12/19/global-warming-and-walnut-trees-a-case-study-in-deception/ http://web.pdx.edu/~rueterj/courses/casestudies/globalwarming/index.html http://www.visionresearch.com/uploads/docs/casestudies/CS_WEB-NETL.pdf http://www.pacinst.org/reports/environment_and_security/env_security_and_climate_change.pdf

Global Warming