• 
  
• 
  
• 
  
• ‘ World - Rich and Poor ' - P.Natarajan.
  A nation’s wealth is the total sum of value of nation’s assets minus its liabilities. It refers to the total value of net wealth possessed by the citizens of the nation at a set point of time.  It also signifies the nation’s ability to take on debt and sustain spending.
  

  The 32nd annual Forbes list says that there are 2208 billionaires which includes 256 women compounding for a net worth of U.S.$ 9.10 trillion in the world. It is reported that Jeff Bezos of Amazon(54 years) is the richest person with U.S.$112 billion as net worth followed by Bill Gates (62 years) of Microsoft with U.S.$ 90 billions. ( Bill Gates was in the first position during 2014 to 2017 ). The 3rd, 5th, 8th, 9th and 10th richest persons in the world are in U.S.A., thus boosting the number of richest billionaires in America to 7 out of the first 10 in the world. The forbes list gives the name of 3rd richest as Warren Buffet of USA and 4th as Bernard Arnault of France. 585 billionaires are in U.S. and 476 in China and the youngest one is Mark Zuckerberg (33 years) of Facebook (US $71 Billion).

  
  

  The richest country is Luxembourg (GDP. US$:105803, followed by Switzerland 80591), Macau (77451), Norway (74941) and Ireland (70638) in this order. USA’s GDP , it is reported stands at US.$59501 (7th in the order).  The richest 20 countries in the world include 15 European Nations, the U.S., Canada, Bermuda and Australia. Ethiopia is the world’s poorest nation where the annual income of a person is stated to be US$100. The poorest 20 include 15 African Nations, Gaza, Nepal and Tajikistan. A great many nations are poor because they depend on one crop which if harvest fails brings disaster. 80% of entire world’s wealth is owned by only 12% of the people and most of them are citizens of U.S. and Europe.

  
  

  The countries which are fortunate enough to have very rich oil and gas reserves have been able to become very wealthy in spite of having only one raw material to trade. The classic example is South Arabia which is proud of being home for 10% of world’s known oil supplies and has prospered despite of having a harsh climate. Oslo has the highest cost of living and Tehran lowest, in the world. The factors contributing favourably for wealthiest countries can be grouped as:- (1) Having rich natural resources, (2) politically stable, (3) climate suitable for agriculture and industry, (4) educated population, (5) political will.

  As we see the world as rich and poor, it would be interesting to analyse the world population contributing for its wealth. If we could shrink the world’s population to a village of precisely 100 people, it would look like this:- 0.61 Asian; 0.13 African; 0.12 European; 0.09 south American and Caribbean; 0.05 U.S.A. and Canada. Whites 0.75 and non whites 0.25;  16 people as illiterate, 16 lack access to safe drinking water, 14 suffer from malnutrition, 47 live in town or cities, 1 will have college education, 8 will have internet at home, 17 under 18 years of age and 25 will have shelter to live. Thus emerges the picture of inequalities in many respects in the world.
  

  Having reviewed the inequalities in wealth for the different countries in the world, it would be refreshening to know 'why' of it and therefore, need arises to study the fundamentals of economics. Economics is a science which studies human behaviour as a relationship between ends and scarce means which has alternate uses. (Adam Smith’s definition who is known as father of Economics). (By way of illustration:)- Step into a big store or Supermarket like Walmart or Target. The store stocks a variety of stocks in large quantities. What we need to buy is limited and further limited by the resources and living space, what we can afford.. In other words, a decision what not to buy becomes essential. It involves choice. Economics is the study of scarcity and choice. We may need to buy, say, bananas. A banana grower in Costa Rica has to match his production of the fruit that is being demanded. Similarly a farmer in Iowa provides the corn which is wanted for breakfast by many. Many important economic relationship can be understood by the theory that each one of us depend upon many others and they intern depend on us.
  

  In the simplified economics model, Total Income = Total Spending.

  
  

  There is bound to be some savings when we adopt the policy of mixed economy. The equation can be rewritten as :-

  
  

  Total Income = Consumer Spending + Savings.

  
  

  Consumer spending also includes investment spending, Hence the equation is revised as:-

  
  

  Total Spending =  Consumer Spending + Investment Spending.

  
  

  Putting these together, we can arrive at:-

  
  

  Consumer Spending + Savings = Consumer spending + Investment  Spending

  
  

  Simplifying. The final equation becomes:-

  
  

  It is a basic accounting fact that savings equals Investment spending for the economy as a whole. Household sector can invest their accumulated savings into bonds, Loans, loan based Securities, Equities in the Stock Market. Owning a diversified portfolio would reduce risks.

  
  

  Rule of 70 is a mathematical formula that tells us how long it takes real GDP per capita or any other variable that grows gradually over time, to DOUBLE.

  
  

  Approximately No.of years to double = 70/annual growth rate of variable. If the real GDP per capita grows at 1% per year, it takes 70 years to double, if the rate is 7%, it will double in 10 yrs.

  India’s average annual growth rate of real GDP per capita is at 4.3% (1980-2010 ) ; China @ 8.9%; Ireland 3.2%; U.S.A. @ 1.7%; France @ 1.2% ( Source IMF; World Bank ).

  Let us now look how markets operate:-
  

  In the context of a Free Market, the price gets fixed where the demand and supply curve intersects. In a competitive market, no participants are large enough to have the power to set the price line. Markets often experience imperfect competition in the real world.

  In the virtual market, individual buyer and seller are not present while the trade takes place via intermediates and through electronic media /internet. The growing importance of e-commerce and electronic business is the order of the day.

  The industrial revolution has set the phase of economic growth in mining, construction, manufacturing industries. Commerce occupies more significant role due to the need for improved exchange and distribution of produce throughout the country as customers insist that timely delivery is the essence of the trade.

  
  

  Macro Economics ( the german word Macro means large) examines aggregate indicators of GDP, unemployment rate, national income, price indices and  inter relationship among the factors of economy. They also develop models to study the relationships between such factors as National Income; Output; Unemployment; Inflation; Stagflation; Savings; Investment; International trade and International Finance.

  Economics do has a say in our way of living. Let us not forget that our life is made of days. It is only in the days of our lives, we find peace, joy and healing.

  Just as a life is made of days, so as days made of moments. A life well lived is planted in the sweet soil of moments.

  Having the Life You Want by

  Being Present to the Life You Have

  pn
• 
  
• 
  

---