EPISODE 1: Season 10
Before we start into Economic Models and Business Cyles, let's get a few terms out of the way.
EPISODE 2: Econ Basics - It's All About the Model
Economics is are simple. It is the understanding the behavior of markets, countires and people with an emphasis on decisions. The difference between the numerious 'theories' of behavior range the gambit from rational to emotional.
The rational models believe that people, the ulitmate players, make decisions in their best interest based on the information available. When they don't the government should intervene. The emotional models believe decisions are feeling based with rationality playing a role in justification. It is a belief that ultimately people will make decisions than government.
Thanx to zerohedge for the following definitions.
EPISODE 3: Econ Happens Within a Business Cycle
Each of the previous models must operate within a business cycle with the exception of Marxism - there is no real market. Since government controls supply and demand, and therefore price, the economic cyle is a function of the goverments response to the global business cycle.
The role of the business cycle is to reward productivity and innovation to achieve growth until the quality of decisions decrease creating bubbles. When a bubble bursts the business cycle cleanses out the bad decisions to better utilize investments in productivity and innovation.
How long and serious is a function of government intervention in the cycle which impacts supply and/or demand and therefore distorts price. Business cycles left unhindered are swift and long lasting (expansions) and contractions short and painful.
EPISODE 4: Where Are We Today & How To Handle It?
This is based on a management approach we developed over the years and advice provided to consulting clients. It is based on the premise the business cycle is outside the control of individual business owners.
The only control we have is our response. During an expansion the owner's focus is on markets in the pursuit of revenue. While in a contraction the focus shifts internally and bring costs under control while holding as much revenue as possible.
Next Show S10.2: How Do I Know Where We Are?
How to apply today's show to your business:
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