Quantitative Easing

Quantitative easing

Definition

An unconventional monetary  policy in which a central bank purchases government securities or other securities  from the market to in order to lower interest rates and increase the money supply. Quantitative easing  is a  monetary policy to increase money supply in the market when there is recession or condition when market is going down .Quantitative easing is considered when short term interest rates are approaching zero or at zero . quantitative easing does not involve printing of new Notes

Quantitative easing targets commercial banks and financial firms  to encourage lending .

Effect  :---

·                                     Very effective in financial slowdown

                                             Done for economic growth

·                                       But too fast quantitative easing can lead to inflation    

Africa Rising

Africa rising

Africa is second largest continent of the world .it is also a undiscovered continent . Africa is a land of large quantity of minerals and fossils fuels .Now a day Africa have 50 percent population below 30 years , so it is youngest continent.

Despite so much mineral and fossil fuel Africa is most backward continent of world ,due to certain policies of colonial countries and after independent  conflicts and violence in Africa is main reason of backwardness. Lack of research and lack of expose to world making them backward . lack of use of resources making Africa backward ,Africa have minerals and crude oil, hydro power  but  technically backward to exploit its vast natural resources.

But due to effort by  united nation peace keeping force there is stability in some countries .Now European countries are investing in Africa .India have also invested in Africa . Indian companies are investing in several countries . India have started skill development program in some countries . Countries receiving strong investment and business interest from India includes south Africa , Angola ,Nigeria due to their high growth market ,mineral rich reserves and crude oil reserves. The resource sector ,especially oil and coal are of particular interest for Indian investors . the pharmacy care are second sector of interest from a export prospective and potential market for medical tourism. Now time is coming when Africa will be a good destination for investment.

In this way Africa is rising 

     

#Economy

Neoliberalism

Neo liberalism

Neo liberalism is a new type of economy concept which major developed economies following since 1970s.it is also related to financialism

Neo means new ,so neo liberalism is a new type of liberalism. Neo liberalism  is a term which uses and definition have changed over time.

Neo liberalism advocates extensive liberalisation, policies of  privatisation fiscal austerity ,deregulation, free trade and reduction in government spending in order to  enhance the role of the private sector in the economy . some expert see it root of financialism and the financial crisis of 2007-2008 one of the ultimate result.

Neo liberalism was originally as economic philosophy aroused in European liberal scholars in 1930s . Neoliberalism advocates market economy instead of social market economy

# Economy

Inflation

Concept of inflation

There should be a balance between supply of goods and services and money floating in the market

Money can have its core value like gold ,silver coin that have value when we melt it, or make jewellery , so  these type of coin have value without any governmental release . or money can have its face value like rupees or dollar paper note . Paper note have no core value but have face value because government releases it through its bank and assure you that note having a face value is able to buy that value .In India central bank is reserve bank of India

Reserve bank of India releases rupee notes and Government of India  releases coins

Inflation and deflation

When the supply of good is greater than supply of  money or money floating in system deflation occur. Means that price of goods will decrease .

And  When the supply of good is lesser than money floating in the system the price of goods will increase and inflation takes place.

 Generally positive inflation rate (1 %to 2 %) is maintained to  make economy increasing and for development.

Let  understand from an example

Assume there is only five apple in the system and government releases only 100 coins ,then one apple cost  is 20 coins. Next year apple production is good and 10 apple is produced that  year and government releases another 100 coins so  200/10=20 ,so one apple cost is 20 coins .in this year the apple price is same as previous year so no inflation and no deflation. Now the system have 200 coins floating , Next year apple production is  same as previous year i.e. 10 apple but government releases  another 100 coin and system money increases to 300 coins  so one apple cost is 300/10 =30  , so the price of apple increases from 20 to 30 this is inflation . Like wise when production increases and money floating is system is same  then price of goods decreases. In this way inflation and deflation takes place

In fact the existing system is very big  and quite complex

Inflation in India depends on food production and agriculture and is indirectly or directly affected by monsoon.

# Economy