User's blog

Author: Parul Verma

  • What is causing the prices to rise the world over? Understanding inflation and its causes

    The most talked-about topic affecting everyone for now almost a year is inflation. Your money loses its purchasing power, you need more money to buy the same amount of goods and services you purchase or use. If you are hiding a lot of money under your mattress or in a safe place at home, trust me it’s a bad idea. You will only be able to buy fewer items with that in the future than now.

    The easiest way to define inflation to a layman is the sustained increase in the average prices of a basket of goods and services that we buy over a specific period. So, when there is inflation, the cost of living goes up. This becomes a real problem if your income doesn’t rise as quickly as inflation, then with your current income, you will only be able to buy less same stuff than before.

    The inflation rate is expressed as a percent change from the previous period. Below is the actual inflation rate in the US in the last 6 years. So if the annual inflation is 6%, it means on average, prices have risen 6% from the last year. As you can see, the inflation slope became steeper in 2020, after the pandemic hit the global economy.

    So, what causes inflation?

    This can happen in two ways: either through demand-pull factors or through cost-push factors.

    The quantity theory of money explains inflation caused by demand-pull factors.

    Demand-pull inflation

    This occurs when people have too much money and they want to buy more, whereas there is not enough supply to meet that demand. Or in other words, too much money is chasing too few goods. This usually happens when the economy is at (or very close to) full employment/full capacity. By full employment, we mean people who are looking for jobs can find one. Also, in this situation, the country’s GDP grows at a rate faster than its long-run trend rate. This happens when there is too much money in circulation. If the bank interest rates are too low, people, both households and businesses can borrow easily and as a result, can buy more goods and services than what the firms can supply. We call this phenomenon “too much money chasing too fewer goods”. Producers increase prices and profit because they can’t increase supply in the short run.

    Using the demand and supply curves, I explain this idea. You see that the demand curve always slopes downwards, meaning people always want to buy more items at a lower price, Also, note that the supply curve faces upward, which means the firms producing those goods would like to supply more at higher prices, With the same assumption that is everything else staying the same. Equilibrium price and quantity are established at P and Q where the supply and the demand curve meet. We call them P and Q.

    To explain this graphically, let’s look at the demand and supply model. On y axis, we denote the general price level, since inflation reflects general price level rise. On x asis we will show the real quantity of goods and services or real GDP. In the graph below, demand will be aggregate demand as this is represents demand from the whole economy. This demand is also downward sloping curve, as the demand for any normal item will be. It shows people overall demand lower quantities when the prices are high and demand more quantities when the prices are low. With the same assumption that nothing else is affecting the demand and everything else stays constant. The aggregate supply curve always is upward sloping meaning producers are willing to supply more at higher prices, so they can get more profits and vice versa. With the assumption that everything else is staying the same, the price level and quantity are set where aggregate demand meets aggregate supply at e. This is the price level consumers are willing to pay and producers are willing to accept and is denoted by P. And the corresponding quantity supplied and demanded is denoted by real production of goods and services or real GDP at Q. Economist call this equilibrium price level and quantity.

    If there is excess money in circulation in the economy, people can afford to buy more, so for each price level, there is an increased demand. Or in other words, too much money is chasing fewer goods.

    In our graph, you will see the aggregate demand shifting to the right or upwards. Now we get the new equilibrium e1, where the new demand and supply meet, and you can see that the new price and the quantity both have increased to P1 and Q1. This happens in the short run when producers don’t increase the supply of goods and services but instead, charge more prices because of increased demand.

    Over time when producers can increase their production, the supply will be increased. In the graph below, this will mean the supply curve shifts to the right. So we can see at the new equilibrium, the prices will fall back. How much the prices fall, will depend on how much adjustment (increase) in supply is made in the long run. If the supply is adjusted enough to meet the increasing demand, then the prices will back to level P and the quantity demanded and supplied will be even higher, as shown at Q2. And the increase in the general price level is controlled.

    Cost-push inflation

    When the supply of the good is reduced due to an increase in the price of inputs in making that good or service. Supply shocks can cause cost-push inflation. Supply can fall due to a variety of reasons, such as if the cost of inputs for production goes up or if there is a natural calamity. Most recently after the pandemic, lockdown jams in major ports have contributed to a slowdown in the supply of a lot of items.

    In the graph above, supply shock has pushed the price up to P1, and Quantity is reduced to Q1.

    How to calculate the inflation rate?

    Inflation is expressed as a % change in the price level of a market basket of goods and services over a period. To understand how inflation is calculated, let’s start with a very simple economy, where people only bought and consumed 3 items – bread, internet, clothing, and a house.  You spend 30% of your yearly income on bread, 10% on clothing, 10% on the internet and 50% on renting an apartment. Then let’s assume the price of bread in year 1 is $2 and the price of internet is $45, price of clothing is $10, and rent is $25000. The price of bread in the year 2022 goes up to $2.5, price of internet becomes $60, price of clothing increases to $15 and rent in year 2 is $30000. We also, in the table below, list the proportion of income or weight they spend on all these items. The sum of these weights needs to add to 100%.

    Inflation from year 1 to year 2 is calculated as (CPI2 – CPI1)/ CPI1 * 100 where CPI1 is the price level in year 1 and CPI2 is the price level in year 2. CPI is a weighted average price of many day-to-day goods and services that a typical American person living in a city buys at a particular time. Don’t be frightened by the term “weighted average”. Weight here refers to the importance of spending on a particular item compared to total expenditure. It simply means more weight is given to goods and services where you spend more money of your income. This could be because you buy that thing more often like, daily or you spend a lot of money buying it.

    If we change the weight of some things from table 1, even with the same absolute increase in price, the inflation % will change. As you can see in table 2, it became 20.02%.

    If the change in prices is more compared to that from table 1, even with the same % of weight, the inflation % will be greater.

    BLS calculates and publishes inflation in the US

    However, our consumption is not just restricted to these four items. In fact, a typical American urban consumer consumes a wide variety of goods, known as the market basket of goods.

    In the US, the Bureau of Labor Statistics calculates something called the CPI (consumer price index). To collect the monthly price data, BLS-trained representatives make personal visits, phone calls, and get online surveys to collect data on what goods and services American people are buying.

    The price and weight info are essentially based on a survey of people of what proportion of their income people spend on a given good or service. BLS tries to calculate the prices of the same basket of goods and services. Now, here some people will argue that what if people don’t consume the same things after some years? That is a subject of further investigation, but the general idea is that the BLS tries to calculate the prices of the same goods and services consumed by the average person over a period for which it is calculating the inflation rate.

    If you are interested, you can check the detailed report here with relative weights and price changes by category. https://www.bls.gov/news.release/pdf/cpi.pdf

    Since CPI is a sample of retail prices and does not cover the complete universe of all prices, it is subject to some errors. However, that sampling error is not statistically significant to change the calculation by a lot. You will have to get into statistics class to understand the more technical aspects of what is considered a significant error or not, but for now, you can understand the error possibility is very small, so it is a reliable indicator of how the prices are behaving in general.

    But when do we need to worry about inflation?

    Well, some inflation is not bad and is considered healthy for the economy. Since our salary/wages have also increased over time and in most cases, some general rise in price level doesn’t hurt our purchasing power.

    The BLS calculates this measure at 1-month, 3 months, 6 months, and 1-year intervals, and publishes that data. Over the last 40 years, we have seen this inflation % on average staying close to 2% annually. That means the same basket of items that you buy is 2% more expensive from 1 year to the next. The goal of monetary policy is to keep the inflation number close to this target-rate.

    But in some countries like Zimbabwe and Venezuela, the prices had risen to a level making it very difficult for people to hold on to their currency. That situation where general prices rise at a rate of 50% per month is called hyperinflation. People know that they won’t be able to buy the same set of goods with that amount of money, even the very next day, so they demand more wages to cope with it. This, in turn, causes firms to pass this burden by increasing the prices of goods and services they provide. This, in turn, causes an increased demand for higher wages and the spiral continues. This is called the wage-price spiral. This can cause a severe crisis in any country.

    To know more about how the Fed uses monetary policy to control inflation, click here.

  • How is GDP calculated?

    Economists have some simple key models to understand our complex economies. One such model is the circular flow model. This model comes handy when we understand why GDP from income method and expenditure method should equal.

    There are two main ways of calculating nominal GDP and will discuss these in detail later in this article. These methods are known as the expenditure method and the income method.

    But first, we should understand the relationship between the income method and expenditure method of calculating GDP in a circular flow model.  The circular flow model shows the linkages between two groups of economic decision makers, households and businesses. It also tells us that there are two types of economic markets, the resource or factor market, and the product market for goods and services. Once we understand this simple circular flow model, it will be useful to understand the complex economy and the GDP computation. In order to learn more about what GDP is, please click here.

    The model begins by assuming a simple economy with two markets:

    • Factor or resource market: a market for factors of production that the firms demand.
    • Product market: a market for goods and services that the households demand.

    By household, we mean people living in a house. Businesses are privately owned entities producing goods and services to sell in exchange for money. It is important to understand that the households and businesses are both buyers and sellers.

    Households are sellers in the factor market. They sell land (including any natural resource like trees), labor, capital, and entrepreneurial ability in exchange for money. Households are buyers in the market for goods and services. Households give money to businesses for goods and services.

    Businesses are sellers in the market for goods and services. Businesses sell goods and services in exchange for money, which they call revenue. At the same time, businesses are buyers in the market for resources. Businesses exchange the revenue earned in the market for goods and services to buy factors of production i.e., land, labor, capital and entrepreneurial ability in the resource market. Here, the money they spend is called the cost of production.

    Let’s understand it better with a simple example.

    When you go to your local pizzeria to eat your favorite pizza, you give your money to the owner for the pizza you buy from him. When you pay your bill, you are buying goods and services. But the money doesn’t remain with the pizzeria owner for long. The pizzeria owner uses part of this money to buy resources such as wheat flour from a farmer. He also pays wage/salary to the server who took your order and also might spend money to purchase a new equipment for his pizzeria. For the pizzeria owner, all these expenditures are costs of production.  After he pays his costs of production, the remaining income is his profit. This is the money he earns as being an entrepreneur owning and operating his business with his skills. Now let’s say your money went to the farmer and that for her, is her income. But that money won’t remain with her for long as well. She will spend it too on other things she wants to buy, and the entire cycle will start again.

    Thus, this circular flow keeps going on and on. Here’s an animation explaining the model, you can see the circular flow between the product market and factor market. You will also see the flow of money between the two. Money flows in one direction while goods and services and resources flow in the other direction. Through this model, we can see the relationship between households and businesses and how these different decision-makers fit together in our big economy.

    In reality, our economy is more complex and has more elements, like, government, foreign trade etc. and we can expand the model to include all these players. But the basic idea won’t change.

    I hope this made sense. Let’s go back to the two ways of calculating GDP and we can see why these two methods will yield similar results.

    Expenditure method: Since GDP is the market value of all final goods and services produced in a country at a given period, if we add the total spending done by all the people in a country, we can get a number close to nominal GDP. We usually categorize these total expenditures done by these four sectors:

    • Household spending includes any new good or service we buy, big or small. So, we will add all our expenditures be it on buying an apple or a new house, in a given period, to get the private consumption component of GDP. We can denote it with C.
    • Spending by firms/businesses on capital and inventory, which we call investment or I. Investment here refers to investment by a firm in machinery, research& development, inventory, etc. We only include investments done by businesses in real assets in the calculation of GDP. We don’t include any financial investments, like buying a company’s stock or bond or a financial asset.
    • Government, like us, spends money on various things. These include big expenditures on building infrastructure, public parks, public-funded education, hospital, nuclear energy, defense, salaries paid to government officials and small expenditures on office supplies, and many more. All of those will be part of the G component of GDP. But we won’t include government spending on any transfer payments, such as pensions to retired people or on welfare programs and subsidies. Those payments are not counted in GDP because no good is produced or service is exchanged against these payments.
    • Spending by the rest of the world (Exports – Imports or net exports). We denote it with NX. Sometimes, a country produces some goods more efficiently than other countries and can sell them to other countries for profit. Those are called Exports. Similarly, the things a country has a comparative disadvantage in making, it can buy from other countries, which can make it relatively cheap.Since GDP, includes only goods produced “within the boundaries of a country.” we will include foreign people’s expenditure on things made in our country or our exports. At the same time, we won’t include us buying any foreign-made goods or our imports.
    • So, GDP = C + I + G+ NX

    Let’s look at the second approach of calculating the GDP.

    • Income method: Here we add the total income earned by all the people living within the boundaries of a country. Economists classify income earners into four broad categories. Labor, land, capital, and entrepreneurship. These are called factors of production- the inputs used in the production of goods and services. Thus, we sum up all the income earned in a given year by these four factors of production using this formula.

    Wages/salary (earned by labor) + Profits (earned by an entrepreneur) + Rent (earned by landowners) + Interest income (earned on capital equipment).

    There is another method, which is less frequently used and is called the value-added method.

    • Value-added Method: In this method, we add up all the value-added at various stages of production. For example, to make a dress, we will calculate the value of the raw material that a fabric company sells to the dress manufacturer ($10), which he combines with his skill and capital ($40) to make a dress worth $50.

    So, these were all the ways of calculating the nominal GDP. To learn more about US GDP, please click here.

  • Global economy will slow down in 2022 and 2023. What policy measures the governments should take to get back to growth trajectory?

    IMF projects lower global GDP growth of 3.6% for the next two years

    IMF’s World Economic Outlook report published on April 19, 2022 has predicted a drop in the GDP growth of the world economies in the years 2022 and 2023 to 3.6%. This downward revision is from their previous estimate of 6.1%, largely because of the war in Ukraine. IMF publishes this report twice every year.

    Below is the chart from IMF showing these growth projections by region. These projections are for real GDP growth and not nominal GDP growth. As changes in real GDP are the most popular indicator of a country’s overall economic condition. If you want to know more about the US GDP and its components, please click here.

    Countries, like the United States, the EU, Japan, the UK, Canada, and other advanced countries are projected to grow on an average of 3.3% in 2022 and only 2.4% in 2023.

    The emerging market and developing countries such as India are projected to grow at 8.2% in 2022 and 6.9% in 2023. Whereas because of the lockdown in Shanghai, China, the projected growth is slightly lower at 4.4% in 2022 and it is expected to be 5.1% in 2023, as the lockdowns are eased.

    As expected, there is a severe double-digit drop (-35%) in GDP projection for Ukraine in 2022. They also project a contraction for Russia due to sanctions and European countries’ decisions to reduce energy imports. The war has also severely impacted emerging and developing Europe, which shares proximity to the war area with an expected fall of 2.9% in their real GDP in 2022. There is a hope of some recovery in 2023 with GDP growth returning to 1.3%. Russia will see a GDP growth of -8.5% in 2022 and -2.3% in 2023.

    The two charts below show the GDP growth comparison in some major countries of the world after the start of the global pandemic. The first chart shows the performance in the years 2020 and 21.

    The second chart shows the projections by IMF for the years 2022 and 2023.

    Sadly, the war just doesn’t affect the countries directly involved, its economic costs and implications are widespread. Through commodity markets, trade, and to some extent financial interlinkages of the countries, the war can indirectly affect so many more countries.

    Globally we are seeing rise in fuel and food prices since late 2021. The fear of War is aggravating high inflation problem even further. Unfortunately, the world’s poor population, particularly in low-income countries is getting the most impacted by this. To know more about inflation, please click here.

    Many leading economists propose mutual efforts by countries to respond to the war crisis and prevent further economic fragmentation. At the same time, it is important to manage the debt problem, tackle climate change and end the pandemic to bring back economic growth.

    Fighting inflation without slowing down the economy is the toughest challenge many central banks are facing currently. To know more about monetary policy and the role of a central bank, in controlling inflation, please click here.

  • What is GDP? In the world of LOL, BRB, IDK, should I need to know another acronym?

    The most widely used indicator for the overall health and size of an economy is its GDP statistics. Government and businesses use these statistics to see how our economy is doing. Usually, a higher GDP of a country indicates a higher standard of living for its people.

    Even though it’s not a perfect measure of the happiness and there are some limitations of GDP, an increase in real GDP over time means the economy is growing overall.

    Let’s start with understanding its literal meaning. GDP stands for gross domestic product. Here the word gross doesn’t mean bad, but it refers to total/aggregate, domestic means within the boundaries of a country and product includes the market value of all newly produced final goods and services.

    By “goods” we mean any tangible product that we can touch, like food, clothing, cars, computers, phones, houses, and numerous other things, which businesses produce to sell for people to consume. So, if you are producing corn on your land but are not selling it to other people for money, it will not be counted in GDP.

    Services, as the name suggests are non-tangible actions that provide us value. These range from a variety of services, such as those provided by a doctor, lawyer, internet provider, teacher, hairdresser, police officer, gardener, cleaner, and many more for which we pay them to be able to use it.

    GDP is the total market value of newly-produced final goods and services produced within a country during a specific period, typically one year. In this definition, it is important to note that GDP will only include final goods and not intermediate goods such as raw materials used to produce that good or service. So, for example, if bread is bought by a consumer, it will be included in GDP. However, the same bread bought by a diner, which uses it as a raw material to make sandwiches, will not be counted in GDP. The reason is that the value of bread in the latter case is already included in the value of sandwich.

    Also, any type of second-hand sale of a product is not included. The goods and services also have to produce within the country. If American cars are produced in China, they will not be included in the GDP of the US. Similarly, Japanese cars produced in America will be included in US GDP and not in Japan’s GDP.

    Two important things to note here are the distinction between real vs nominal GDP and the population size of a country.

    Real GDP or Nominal GDP: Which one should I care about?

    Nominal GDP is calculated at nominal prices or current prices. Here, we sum the expenditure on all newly produced goods and services at the prices prevailing at that period when we calculate it. However, real GDP is GDP calculated at base-year or constant prices. If we see a higher nominal GDP number than last year’s, we need to examine what is the main reason behind the increase.

    Since GDP is the market value of all final and newly-produced goods and services. Hence, the price and quantity of a product both will play roles in affecting the direction of GDP. A higher nominal GDP might simply be due to high prices without any change in the number of goods and services produced.

    If we see prices rising over time, it will give us a higher nominal GDP number, even though the quantity of goods and services produced by a country hasn’t changed much. 

    For real growth to happen, the economy needs to be producing more goods and services. So, the real GDP is what matters, GDP that is adjusted for inflation.

    Real GDP Per person is what matters for the standard of living

    GDP can be higher if there are more people in a country, so more goods and services are needed to be produced. To measure the standard of living of people, we need to adjust for population size. When we divide real GDP by its total population, we get Real GDP per capita.

    How do we calculate GDP?

    There are 2 main ways of calculating it. These ways are the expenditure method and the income method.

    Why do countries care about calculating GDP?

    This calculation comes in handy when we want to compare different countries, and when we want to see how well a country is doing overtime. It is the most widely used indicator of economic growth.

    So when we are looking at GDP numbers, we either look at them either in comparison to other countries or how the GDP over time is trending. I pulled data from the World Bank to show the trend of Real GDP in some of the world’s largest economies.

    Another important factor to look at is the real GDP growth rate. GDP growth is the % change of GDP in a given year from GDP in the previous year. In the US, these calculations are done using the National Income and Product Accounts (NIPA) guidelines and published by the Bureau of Economic Analysis. Here is the chart showing US Real GDP over time. As of May 26, 2022, the US GDP is Q1 2022: 19,731.119 billion (chained dollars at 2012 prices).

    During a period of rapid economic growth, the real GDP of a country usually grows at a rate of 7-8% or more per year. As the country reaches a developed or advanced economy status, GDP growth becomes more stable at 2-3% a year.  

    Many factors can contribute to continued GDP growth, including natural resources, capital, human capital, technological advancements, and good institutions. Countries that exhibit higher GDP growth, typically have all these factors contributing to it.

  • What is economics and why should I learn it?

    A lot of people think economics is all about money, banks, complicated graphs, and mathematical modeling, but truly speaking it is much more interesting than that.

    So, what exactly is Economics?

    Economics is a study of human behavior, understanding the choices people make with their limited resources. By resources, we mean the tools needed to produce goods and services for humans consumption for a comfortable life. These resources are usually classified into 1)land, 2)labor, 3)capital such as tools and machinery, 4)human capital or entrepreneurship, and 5)our precious time.

    We don’t usually have an infinite amount of these resources, so how do we allocate the limited resources to make us better off and happier? In short, Economics deals with our struggle to achieve happiness in a world full of constraints and limitations.

    The word Economics comes from the Greek word oikonomia, which means household management. It starts with an individual making a tradeoff, choosing the best option that satisfies their wants, and forgoing the other best alternative use of their resources. From individual households, it moves to businesses, deciding what and how much to produce and sell. And lastly, government and the central bank decide when and how to intervene to ensure maximum happiness for its citizens.

    We are making choices every single day. For example, if you are reading this, you have chosen to gain some knowledge vs. maybe, watching a TV Show or doing something else.

    While reading this, you think you are making the best use of your time. (or at least I hope you do 😉 In short, you apply economics every minute (even when you don’t know it).

    What does the field of Economics cover?

    As you learn Economics, you can find answers to some fascinating questions such as:

    • How the price of anything is set?
    • How do we measure a country’s prosperity?
    • Why are some countries rich, while others are still poor?
    • What is inflation?
    • How do we understand business cycles?
    • What tools do the central bank and government use when the economy is facing inflation or a recession?
    • Is international trade a good thing?
    • And is reading this article even worth my time?

    Trust me, the list is endless. There is a wide variety of areas that economics can cover. Economists try to solve many of these problems our world is facing today by simply understanding human behavior and the choices people make. I might have used the word choice a lot here, but hope you got the idea?

    You will understand our rapidly evolving complex economies and how the economic fundamentals can still explain the changes.

    You can apply Economics in your day-to-day life, such as while analyzing the cost and benefits of a particular decision you are going to make and managing your finances.

    Similarly, you will also understand how economic principles apply to the businesses around us from a small local donut shop to a big company like Apple.

    Understanding economics will enable you to evaluate the feasibility of promises made by politicians to get your vote.

    Believe it or not, Economics can also help us understand the best strategy to deal with environmental issues, such as global warming and pollution.

    Last but not least, since Economics is based on human behavior, there can be more than one view on any economic issue. It’s not an absolute science and many times economists differ on how a certain situation should be handled.

    When you study Economics, you can acquire the necessary skills to argue why a specific viewpoint makes more sense to you.

    Some key principles of economics are:

    • Everything has an opportunity cost and experiences diminishing returns.
    • People are rational (for the most part) and act in their self-interest (even charity is considered self-interest since it gives you some happiness).
    • Supply and demand interact through an invisible hand.
    • Comparative advantage fosters trade.
    • People think on the margin.

    I will explain the above points in detail in my other posts. We will also dig into the two main subdivisions of economics: macroeconomics and microeconomics. We are only getting started!

  • About me and why did I start this blog?

    Hello! My name is Parul Verma and I love Economics. I got fascinated by this course in high school when I was first introduced to it.

    My educational background and experience

    I have an M.A. in Economics from the University of Southern California, Los Angeles, California, and a B.A. (Hons.) in Economics from Shri Ram College of Commerce, University of Delhi, India.

    I always wanted to teach economics or work in policy making. Coming from India, giving quality education to unprivileged children in India would have been my dream job.

    But, destiny had some other plans. My first job after completing college was in New Delhi, India. I was writing content for a website called economywatch.com.

    Later, I came to the U.S., got married, and worked in economic and financial consulting for 6 years. In that industry, I worked on a wide variety of cases involving economic and financial analysis and learned many new skills.

    Motherhood happened

    Even though the job I did was enriching, I was facing this continuous guilt of not spending enough time with my firstborn. She would stay in the daycare 9-6 pm since she was 5 months old.

    After the birth of my second child, working in a fast-paced industry with loads of overtime work, like consulting, wasn’t working for our family. The opportunity cost of working in that setup was huge for me. Wait, what is this fancy term, I just used? I just introduced you to a fundamental economic concept called opportunity cost. Don’t worry if you never heard of it before, I will explain that in detail in a separate post.

    Coming back to my story, I decided to take a break from consulting, and focus on raising my kids. I love helping them with their homework and learning new things with them. I also do part-time work for my in-laws’ clothing business in the US. If you like hand-beaded clothing, please check out my collection online at AdritiCouture.

    I was looking to use my education and knowledge

    However, being an economics major, the best use of my time and knowledge is very important to me. At the same time, my goal isn’t just to make more money but to live life on my terms doing something I truly enjoy. So, I started weighing the options of doing a job vs. starting my business. I was looking for something to do that would do justice to my education, my experience, and my time. Something I like and could continue for a long time, while still enjoying special moments with my children.

    This blog was the perfect solution

    Recently, my husband gave me the wonderful idea of starting this blog. The hidden teacher in me got so excited!!! To be able to jot down my thoughts on economics topics sounded very interesting to me and I sensed my calling in this venture. My husband is a tech-savvy guy and made the perfect website layout for me, which I couldn’t have done myself. Thank you, dear hubby, for all your support.

    I also want to thank all my economics teachers, in particular Prof. S C Panda (Univ. of Delhi), and Prof. Jeffrey Nugent (USC) for cultivating my passion for economics. Last but not the least, I also want to acknowledge the support of my family members who encouraged me to start this blog. All the various economics books and online articles I have read (must thank the internet for that) helped me gain enough knowledge to share my thoughts with you all. Together, they all gave me the inspiration to start writing without any further delay.

    In this blog, I will explain everyday economics and personal finance topics that I think people should know about. Alongside, I will be writing about the current US and global economic events, and explain the economic rationale behind them.

    I will keep it simple so that even someone with no economics or finance background can understand.

    Some of my articles might be more relevant for students who are currently studying or plan to study economics in high school or college.

    Hopefully, through my videos and blogs, you will gain some useful knowledge and can make informed decisions. At the very least, you can have intelligent conversations about our rapidly changing economy at your dinner table.

    I’m happy to receive your feedback and will try to answer any questions you may have. So, enjoy reading!