In this blog in the series, “Economics made Easy” I have narrated how practical real life examples can be used to understand a state or nation’s macroeconomic picture.
Introduction of my Friends in Meerut, Uttar Pradesh
A: A is an engineering student. His family is engaged in sugarcane farming.
B: B is a goldsmith.
C: C runs a grocery store.
D: D does potato farming.
Feedback from my Friends
A: Sugar mill owners have not cleared the payment dues since long. The farmers are hence cash strapped.
B: Sales of jewellery in the Diwali and marriage season have been lower than last year.
C: Sales in the Diwali season have been one of the worst ever.
D: There was a bumper crop of potato in the past season. Prices were extremely low and continue to be so. Farmers have suffered because of the low rates.
Macroeconomic Picture Constructed from Feedback
Meerut and Western UP are traditional areas for sugarcane and potato farming. The economic situation of both these farmers is bad. There is paucity of funds in the rural economy. The rural demand is low. The effect of low rural demand is corroborated by the subdued Diwali and jewellery sales. Data shows that Western UP has almost 70% population engaged in farming. We also know that UP is the most populated states of India. Understanding the economic situation of UP can give some idea about the state of India’s economy.
Conclusion: Practical Economics
Small samples, like given in the above example can be collated to construct an approximate macroeconomic picture. I request my students to please observe such economic phenomenon to understand the macroeconomic state of the education sector ( for students), the industry in which they are working ( professionals), their district and state. Extrapolation of such observations can give an approximate macroeconomic picture. I assure you that this study would be an interesting experience and make you understand the fascinating subject of economics!