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Category Archives for "Fundamental"

The formula of dT>0

What is the fundamental of economics?Transaction.Mathematically, dT >0 where T means transaction.For example, the wealth between a programmer with a baking pan and a baker with a laptop is not a cooking pan plus a laptop. Instead, the baker can maximize the wealth by exchanging the baking pan with a laptop. The wealth = baking […]

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The positive feedback and negative feedback mechanism

Everything is interconnected rather than linear causality.For example:Increasing the money supply would cause a lower value of the currency. This is a cause and effect relationship. In fact, there are many factors that contribute to currency depreciation. i.e. The currency is relatively weaker than other currencies; The national productivity declines; High debt; Poor economic system…etc.How […]

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The Iron Triangles

In software development, we have:In economics, we have:In life, we have:For investment we have:ThoughtThe world is all about balance and trade-off.Everything is interconnected and dependent.Change in one variable will affect the others.Thinking in systems is very important.

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Economic Analysis in One Graph

The economic analysis is all about the study of the currency credibility of a nation under its economic system.Example of the economic system: a developing and a developed country.For a developing country, currency credibility comes from regime power.For a developed country, currency credibility comes from central banks.The credibility is mainly affected by inflation and debt.Debt […]

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