I desired to have my first blog post to have the picture of my son. Finally material presented itself that helped me achieve this that too using my fav topic of economics. With 2008 being an year of economic turmoil and all such stuffs, this post could not have come at a more opportune time. So here we go . . .
My rudimentary understanding of macro economics tells me about how the symbolic "interest rate" aka short-term lending rate steers the economy in the right direction. Typically in an economic downturn, the "Fed Reserve chief" tweaks the rate lower to stimulate the economy by making cheap credit available. As an when the economy picks up momentum, he/she tweaks it bit higher to keep a check on the exuberant economy from creating bubbles and also keeping tab on the inflation.
Folks, here I present, why my son, who is 2yrs old to date, is well qualified for the post of the Fed Chief, in my observation. For the past couple of months I have been noting his uncanny ability to keep my wife's emotions in check by changing his behavior. When she is very exuberant ("booming economy"), he ("Fed chief") suddenly becomes moody, less talkative, less active or even catches cold from nowhere ("increasing interest rate") and brings down my wife's cheers to normalcy ("economy stabilizes"). On the other hand, once she has landed or even down to the extent of worrying too much ("economic slow down"), he shifts gears and becomes very active, talkative, running around cheerfully, jumping on bed ("lowering interest rate") which brings my wife back to normalcy ("economy stabilizes") again. To complete the analogy, needless to mention, we all know the economy loves the Fed Chief and looks forward to him no matter we are in a downturn or a boom :-)
My rudimentary understanding of macro economics tells me about how the symbolic "interest rate" aka short-term lending rate steers the economy in the right direction. Typically in an economic downturn, the "Fed Reserve chief" tweaks the rate lower to stimulate the economy by making cheap credit available. As an when the economy picks up momentum, he/she tweaks it bit higher to keep a check on the exuberant economy from creating bubbles and also keeping tab on the inflation.
Folks, here I present, why my son, who is 2yrs old to date, is well qualified for the post of the Fed Chief, in my observation. For the past couple of months I have been noting his uncanny ability to keep my wife's emotions in check by changing his behavior. When she is very exuberant ("booming economy"), he ("Fed chief") suddenly becomes moody, less talkative, less active or even catches cold from nowhere ("increasing interest rate") and brings down my wife's cheers to normalcy ("economy stabilizes"). On the other hand, once she has landed or even down to the extent of worrying too much ("economic slow down"), he shifts gears and becomes very active, talkative, running around cheerfully, jumping on bed ("lowering interest rate") which brings my wife back to normalcy ("economy stabilizes") again. To complete the analogy, needless to mention, we all know the economy loves the Fed Chief and looks forward to him no matter we are in a downturn or a boom :-)
No comments:
Post a Comment