Economic Doctrines and Systems: A Comparative Analysis
Economic Doctrines
Physiocracy
Physiocracy divides society into three classes:
- Farmers: Those who increase the country’s wealth and secure a net product (the fruits of the earth).
- Landowners: Considered privileged by nature, their rights are sacred and untouchable.
- Sterile Class: Limited to transforming, selling, or consuming the fruits of the earth.
Keynote speaker: François Quesnay. The best form of government is considered to be despotism.
Core Tenets:
- Human intervention in nature is seen as disruptive
Investment Analysis & Financial Market Dynamics
Simulation & Investment Decisions
Sensitivity Analysis
Sensitivity analysis considers changes in variables, with only one change in each simulation. It provides a tool to answer “what if” questions (key variables: units sold, selling price). By comparing changes in different variables, we can assess project risks and make decisions accordingly.
Scenario Analysis
Scenario analysis considers changes in two or more variables simultaneously. It allows us to consider the best and worst-case scenarios.
Read MoreWelfare State Crisis: Public Spending Analysis
The Crisis of the Welfare State
The pact that went home to the welfare state after World War II, which generated positive results, is broken. The reference to the social crisis of the state is very global. Analysts do not consider the State as a macroinstitution. No wonder that the policy is within the area of welfare and loses the perspective of the entire state.
1. On Public Spending Growth
In connection with the crisis of the welfare state, it is often pointed out first to do with public spending.
Read MoreUnderstanding Economic Systems: Market, Planned, and Mixed
Economic Systems: An Overview
Resource Allocation
An economic system is the mechanism used to organize economic activity and resolve the economic problems of resource allocation.
Resource allocation: is the set of decision factors for determining the products we use. Every economic entity considers:
- What occurs?: How many inputs and outputs are employed, and the final amount: consumption/production methods, quantity/quality, domestic/international.
- How do I produce?: How to combine the factors of production,
Understanding Production Factors and Economic Systems
Factors of Production
Factors of production are classified into three categories:
- Land (Nature): Resources that nature provides.
- Labor: Physical and intellectual faculties of human beings involved in the production process. Labor is a basic production process.
- Capital (Physical or Real): Includes buildings, factories, machinery, equipment, and other means used in the production process.
- Human Capital: Education and vocational training that increase work performance.
- Financial Capital: Funds needed to
Mercantilism, Free Trade, Globalization, and Companies
Mercantilism
Advantages:
- Capital accumulation through increased holdings of gold and silver (mercantilism), which was a sign of wealth for the nation.
- Emergence of manufacturing production (manufacturing facilities), which is labor-intensive.
- Source of wage labor.
Cons:
- The process of capital accumulation through capital appreciation.
- Relentless pursuit of profits for companies.
- Socioeconomic system is unethical because it favors some and disadvantages others.
Free Trade
Free trade is an economic concept
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