{"id":494,"date":"2014-02-04T18:41:05","date_gmt":"2014-02-04T18:41:05","guid":{"rendered":"https:\/\/inkinsights.com\/?p=494"},"modified":"2016-07-08T14:18:58","modified_gmt":"2016-07-08T14:18:58","slug":"how-to-understand-an-economy-of-a-country","status":"publish","type":"post","link":"https:\/\/inkinsights.com\/?p=494","title":{"rendered":"How to Understand An Economy of a Country?"},"content":{"rendered":"

\u201cEconomy is the method by which we prepare today to afford the improvements of \u00a0tomorrow.\u201d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u2013 Calvin Coolidge<\/strong><\/p>\n

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A beautiful quote on Economy by 30th<\/sup>\u00a0President of America \u2013 Mr. Calvin Coolidge (1872-1933).<\/p>\n

But an important question is how to understand an Economy, so we will try to understand in simple terms.<\/p>\n

At first instance when we study an economy of any country we usually see the GDP figure of that particular country, yes this is quite a correct indicator.<\/p>\n

Gross Domestic Product (GDP) shows a country\u2019s standard of living. I won\u2019t go in detail to explain what GDP is? But yes this is the first and foremost indicator of an Economy.<\/p>\n

But is GDP figure enough obviously No. We have to study in depth so we will move towards the next step i.e.\u00a0\u00a0\u201cType of Economy\u201d.<\/strong><\/p>\n

To know the actual position like Production & Consumption Pattern we need to understand which kind or type of Economy is \u2013 whether a\u00a0Capitalistic<\/strong>\u00a0or\u00a0Socialistic<\/strong>\u00a0or\u00a0Mixed.<\/strong><\/p>\n

Every country has its own history so the economy has also undergone many changes as per the history and progress of every nation. In this century alone there were many changes specially after the two World Wars, the global economy has evolved.<\/p>\n

Types of Economy<\/strong><\/p>\n

\u201cEconomic System is the system of Production, Distribution & Consumption.\u201d<\/strong><\/p>\n

In this way Economy is divided into three categories:<\/p>\n

1)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Capitalistic<\/strong>\u00a0(Free Market, Open Competition, Profit Motive & Private Ownership)<\/p>\n

2)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Socialistic<\/strong>\u00a0(Planned Economy, Social ownership to meet Human needs and not to\u00a0create Profit)<\/p>\n

3)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Mixed<\/strong>\u00a0(Capitalistic + Socialistic)<\/p>\n

Whenever we try to find the original picture of any country then it is very important to understand the Means of Production \u2013 Control and Ownership, Distribution of Wealth.<\/p>\n

Important Note:<\/strong>\u00a0Recently on 12th<\/sup>\u00a0November 2013 in China there was a large gathering of almost 400 people in which Government Officials, Top Beaurocrats and Businessmen collectively & unanimously discussed and created a growth model for China for the upcoming Decade. Same kind of previous meeting held in China in 1993 and we all can see where the China is \u2013 right from 1993 to 2013.<\/p>\n

This is why History of any Nation helps to understand its Economy.<\/p>\n

Which Country is following Which Economy<\/strong><\/p>\n

Capitalistic<\/strong>\u00a0\u2013 USA, Switzerland, Canda, Australia, South Africa<\/p>\n

Socialistic<\/strong>\u00a0\u2013 North Korea, China, Russia<\/p>\n

Mixed<\/strong>\u00a0\u2013 India, England, Germany, Sweden, Italy, Hungary, Mexico<\/p>\n

After understanding the Type of Economy now What Next?<\/p>\n

Now I want to highlight those\u00a0indicators<\/strong>\u00a0which show some statistics that help in deriving the real picture of an Economy. I am not going as per any Textbook method but this is the way I follow to get into the depth of any country\u2019s economy.<\/p>\n

Let\u2019s figure out some Important Indicators and I am highlighting them as per the categories.<\/p>\n

1)\u00a0Population<\/strong><\/p>\n