Economic Slowdowns: Fundamentals Overshadowed by Structural and Policy Problems

Abstract

Whenever recession looms around, experts start blaming policy paralysis, wrong policies, policy implementation and vision of the government. Policy makers, their advisers and economist will think around narrow technical aspects of ‘economics’. Economists will talk about structural problems. Hardly someone goes beyond investment, demand, supply, saving, inflation and bank rates. This paper breaks on the basics. We try to dissect fundamentals of the economy. The variables of economy like investment, demand, supply, saving, inflation and bank rates are man-made. The government attempts to control economy by fixing bank rates, tax rates, financial incentives and so forth. Policy makers ignore the psychological and social factors that influence the economy. The paradigm shift in thinking is required to see beyond narrow definition and elements of ‘economics’. It must understood that economics and it’s so called elements are not in isolation. Those elements are not well understood like Mendeleev's table of elements. Elements of economics are required to seen in bedrock of personal, social, technology and political issues.