Sunday, May 6, 2012

Unstable nature of Economic and Financial Policies...

If we were to wrap up the whole human life into a single subject, that would be none other than Economics. A good academic book of economics would say that the beginning point of the economics is the human behaviour. To put it more accurately, it is the human needs and methods of fulfilling them. Since the human life always keeps changing rapidly, no economic policy can hold good all the time. We should understand the dynamic nature of human life which is otherwise known as Evolution of living beings and the development of culture. It is very apt here to remember and correlate the globalization process. So, it is clever to remind that as and when one devises an economic policy, it should be in accordance with the changing needs, preferences and the methods of gratifications. For that, the factors such as psychological, social, political
and technological - prevailing in the respective time period must be taken into account precisely. Ignoring or overlooking or forgetting the above concept shall leave any economic policy ineffective and unrealistic and obsolete in course of time. This is the reason why there is a big gap between the economic, financial policies of the government and the actual situation of the country. Scholars of  economics have to spend their precious time thinking this way for the welfare of mankind.

Let me elucidate an simple example for understanding. The following three terms are frequently used in economics viz Supply, Demand and Price. Before ten or fifteen years, for example, if the supply of goods (production of goods) by the companies has increased, automatically the price of goods would witness a decline. But, What is happening now?  Even if the supply of goods (Production) increases, price level doesn't fall. Instead, it raises constantly. Only here in this juncture, the behaviour  of the people comes into picture. The greedy Industrialists tend to produce more numbers of goods and how can they make the consumers (people) buy the products? They, with the help experts of advertising, formulate appealing and attractive advertisements to create artificial willingness in the people's mind to buy goods. Consumers(people) even without real needs go for purchasing the products. Consumers fall prey to the greedy fellows. They are stimulated by the advertisements. This behaviour of consumers may be called as impulsive buying.

Upon seeing both Producers(Industrialists) and Consumers(People), we can apparently notice that the behaviour takes the vital role.  That is why i stress that the changing tendency and mindset of society must be analysed and considered precisely prior to formulating any kind of financial or economical policy, for it has to yield fruitful results to the individual and the society as a whole.

Note:  The name of above film is 'Orae kadal' a malayalam film. It talks about the minute feelings of humans and unanticipated events caused by the economic crisis of an individual. Mammotty plays the role of Economics professor and Other casting Meera Jasmine and Naren. This film won the national award for backround music score and it has excellent acting performance by all actors.

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