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Question: Identify an industry or business in which you are interested. This could be a career interest are...

Identify an industry or business in which you are interested.

What economic principles and associated analytical perspectives/tools are most helpful in deeply understanding the changes that are occurring in the strategic context of the industry in question? Provide a specific example of an economic insight that could be gained and subsequently leveraged to heighten the organization's competitive performance. What are some of the kinds of macro-economic changes that will be difficult to predict with existing economic models?

Answer 1

Firstly macro economics deal with the economy as a whole.

Economics models plays a very important role since it specifically tells us about the view point, assumptions, limitations and advantages the specific field of economics is dealing with.

Now there exists some of the kinds of macri- economic chamges that will be difficult to predict with existing economic models. They are explained as follows:-

1.There are 2 types of models-

stochastic and non-stochastic, further more divided as discrete or continuous based models.

Few examples of economic models-

Cobb Douglas model of production

Solow-Swan model of economic growth

Lucas island model of money supply

Now, Few of them still lack the real consequences of economy that is faced in the free market.

-Unable to understand the real cause of downfall of economy.

-Proper time management between the action and reaction of the economy.

-Difficulty in covering all the parameters of all the sphere.

- Sometimes they incorporate with the Government intervention , policy making between the market and public in the existing economy.