Facts about World Economy

• Economics is the branch of social science that deals with the manufacture, supply and consumption of commodities and services.
• Aphnology: The Science of Wealth
• Economics is divided into two branches. They are Micro Economics and Macro Economics.
• Micro Economics deals with the personal decisions of consumers and entrepreneurs. It is also known as Price Theory. It is developed by Marshal, Ricardo and Pigou.
• Macro Economics deals with the larger aspects of nation's economy such as sectors of agriculture, industry and service. It is also known as General Theory. It is developed by Keynes.
• Father of Modern Economics is Adam Smith. He is a pioneer of political economy. His first modern book on economics is Wealth of Nations.
• World Nations are divided into three, Developed Nations, Developing Nations and Least Developed Nations.

Developed Nations

Developed Nation is a country which has a highly developed economy and advanced technological infrastructure relative to other less developed nations. USA, Canada, France, England, Germany etc are considered as developed nations. The continent with highest number of Developed Nations is Europe. The Developed Nations in Asia are Singapore, Japan, and South Korea. The country with highest per capita income is Luxembourg (2017 - 2022). The country which has Highest Economic growth is United States.

Developing Nations

A Developing Nation is a country with a low income, undeveloped manufacturing base, and low Human Development Index (HDI) compared to developed countries. Economically backward states are known as Developing nations. 'Third World countries' is another term for developing countries. BRICS (Brazil, Russia, India, China and South Africa) is a society of developing nations. BRICS countries are the fastest growing economies in the world.

Least Developed Countries (LDC)

Least Developed Countries show signs of the lowest socio economic development having the lowest Human Development Index ratings among all countries in the world. They are underdeveloped economies in Asia, Africa and Latin America. They have very low GDP, Low Per Capita Income, high rate of population and unemployment. Example: Countries like Ethiopia and Somalia.

Largest Economies

• On the basis of current monetary exchange rate - USA - First position, China and Japan are at second and third place, Germany fourth place and India is at tenth position.
• On the basis of Purchasing Power Parity basis (PPP), China First position, USA Second and India at third place. Japan is in Fourth place.

Types of Economy

• Capitalist Economy: The main characteristic is the existence of private enterprise in the main sphere of production. Example: Countries like USA, Britain, France etc
• Socialist Economy: The main characteristic is the existence of state ownership of capital in all the central area of productive activity.
• Communist Economy: It is a classless economy and in which people work according to the principle from each according to his ability, to each according to his needs. Example: Countries like China, Cuba, Vietnam, North Korea.
• Mixed Economy: An economy with a merge of state and private enterprises. Most actual economies are mixed. Example: Country like India.

Three Sectors of Economy

• Primary Sector deals with the obtaining and refining of raw materials. Example: Agricultural Sector
• Secondary Sector includes the processing of raw materials into finished goods. Example: Industrial Sector.
• Tertiary Sector (Service Sector) deals with the services to businesses and consumers. Example: Banking, Insurance

Stock Exchange:

• Stock Exchange is a market share where the stock are brought and sold stocks refers to securities.
• Bull and Bear are Stock brokers who operate in different style.
• A trader who anticipates the worth of share to fall is called a bear.
• Bull is the type of a investor, who stands to gain with a climb in the worth of shares and stocks.
• There are 138 stock exchanges in the world.
• Largest stock exchange in the world is Tokyo.
• American stock exchange is at Wall Street of New York.
• First European stock exchange is established in Antwerp, Belgium, in 1531.

Major Stock Exchanges

• Newyork Stock Exchanges (NSE)- USA
• Tokyo Stock Exchanges- Japan
• NASDAQ (National Association of Securities Dealers Automated Quotation System) - USA
• Euronext - Europe
• London Stork Exchange - UK
• Shanghai Stock Exchange - China
• BME Spanish Exchange - Spain
• Bombay Stock Exchange – India

Economist and their Contributions

• Alfred Marshall - Law of demand
• Thomas Malthus - Population Theory
• Adam Smith - Laissez Faire
• Marshall - Quasi rent
• Alfred Marshall - Marginal Utility Theory
• Karl Marx - Labour theory of value
• Alfred Marshall - Welfare definition of economics
• Samuelson - Modern utility theory
• Amartya Sen - Welfare Economics and Human Development Theory
• Daniel Kahneman (USA) - Behavioral Economics, Prospect Theory
• Edward C Prescott (USA) - Quantitative general equilibrium business cycle theory.
• Edmund S Phelps (USA) - Micro foundations of Macro Economics.
• Joseph E Stiglitz (USA) - Screening
• James Tobin - Portfolio theory, Keynesian economics.
• James J Heckman (USA) - Statistical analysis of individual behavior.

International Financial Institutions

International Monetary Fund (IMF):

• IMF was established in 1945 but it began its operations on March 1, 1947.
• Headquarters: Washington, USA
• It is an organization of nations that look for promotion of international monetary co-operation, aids the growth of trade and to contribute for increased employment and better monetary conditions in all member countries.

IBRD or World Bank

• The International Bank for Reconstruction and Development (IBRD) or World Bank.It was established in 1944 it came into being on December 27, 1945. The Headquarters is at Washington (USA).
• IBRD has two affiliates - the International Development Association (IDA) established in 1960 and the International Finance Corporation (IFC) established in 1956.
• It assists in the renovation and progression of the territories of the member countries by providing the capital investment for productive purpose.

World Trade Organisation (WTO)

• The World Trade Organisation (WTO) was established on January 1, 1995 by the Marrakesh Agreement signed at Marrakesh, Morocco on April 15, 1994.
• It succeeded the General Agreement on Tariffs and Trade (GATT) setup in 1948.
• The main objective of the WTO is the liberalisation of world trade.
• The headquarters is at Geneva (Switzerland).

World Economic Forum (WEF)

• WEF is a Geneva-based non-profit foundation.
• WEF is conducting annual meetings in Davos, Switzerland. The meeting is attended by the eminent business leaders, famous political leaders, VIP personals and media correspondents to talk about the most critical issues facing the world. The topic may be on health and the environment matters.

Asian Development Bank (ADB)

• The Asian Development Bank (ADB) is started for the regional development of banks in Asia. It began its operations on 22 August 1966.
• Its headquarters is at Manila.

Important Books in Economics & their authors

• Choice of Technique - Amartya Sen
• Development as Freedom - Amartya Sen
• Poverty and Famine - Amartya Sen
• Communist Manifesto - Karl Marx & Fredrik Engels
• Das Capital - Karl Marx
• Wealth of Nations - Adam Smith
• The Affluent Society - J K Galbraith
• Asian Drama - Gunner Myrdal
• Great Depression of 1990 - Ravi Batra
• Argumentative Indian - Amartya Sen
• Value and Capital - John R. Hicks
• Foundations of Economic Analysis - Paul A. Samuelson
• Capitalism and Freedom - Rose Friedman
• Peddling Prosperity - Paul Krugman
• American Capitalism - John Kenneth Galbraith
• The Two Trillion Dollar Meltdown written by Charles R. Morris
• The Road to Serfdom - F. A. Hayek
• Risk, Uncertainty, and Profit - Frank H. Knight
• Human Action - Ludwig von Mises
• Prices and Production - Friedrich Hayek
• Time and Money - Roger Garrison
• Theory and History - Ludwig von Mises
• The Theory of Free Banking - George Selgin

Currency

• Currency & Coins are known as Legal Tender Money.
• Bank money or deposits are Non legal tender money.
• The country which approved gold standard for first time was United Kingdom.
• The financial Capital of Europe is Zurich in Switzerland.
• Plastic Money is a Popular name of Credit Cards.
• Official currency of the United States of America is US dollar.
• "Money is what money does" is the quote of Walker.
• "Bad money drives, Good money out of circulation" is the quote of Thomas Greshom.
• The highest valuable currency is Kuwait Dinar.
• The Euro is the official currency of the European area. Out of 28 member states of European Union (EU), 19 states are using Euro and is the currency used by the EU institutions. Euro is not used by Britain (Pound), Denmark (Crown) and Sweden (Crona).
• Last country to accept Euro is Latvia (2014).
• The Euro was set up for global economic markets as an accounting currency on 1st January 1999.
• Euro coins and bank notes started to circulate from 1st January 2002 onwards.
• The world's smallest coin is in Nepal. It Weighed only .002 grams.
• The world's heaviest coin is in Sweden. It weighed about 43 pounds 7 1/4 oz
• World's smallest bank note is in Morocco. It has the size of a postage stamp.
• World's largest bank note is Chinese 1 Kwan. It is printed in the 14th century, measuring 9x 13 inches.

Banking

• First bank in the world is Royal Bank of Scotland (1728).
• A Central Bank or Reserve Bank is the Apex Bank of a country. It is responsible for the formulation and implementation of the monetary policy of the country. It issues currency for the country. It is the custodian of the foreign exchange.
• Central Bank of USA: Vederal Reserve
• Central Bank of Japan : Bank of Japan
• Central Bank of England: Bank of England
• Supervision and control of Euro is European Central Bank. Its headquarters is at Frankfurt.
• The first bank to issue Traveller's cheque is the American Express (1891).
• The founder of Bangladesh Grameen Bank is 2006 Nobel laureate, Muhammad Yunus. Yunus implemented Micro Credit scheme.
• IDA is International Development Association. It is also known as Soft Loan Window.
• Islamic Banking is consistent with the principles of the Sharia (Islamic rulings). Sharia banned the fee or taking of interest charges for the lending money.
• ‘World's Local Bank’: HSBC
• ATM is Automatic Teller Machine.
• Internet Banking: Banking transactions done with the help of Internet.
• Mobile Banking : Accessing of one's bank account from one's mobile and transferring fund to other accounts and making payments.
• The biggest source of aid to the third world is World Bank.
• The rate at which world bank provides loan to underdeveloped countries is 5.5%.

Great Depression

• The Great Depression is one of the world-wide economic depression. It was the longest, deepest, and most wide-spread depression of the 20th century. It started in 1929 and lasted till 1933. The depression begins in the United States, following the drop in stock prices in September 4. 1929. It became worldwide news with the stock market crash of October 29, 1929. This day is also known as Black Tuesday.
• Global Recession in 2008 : Worst financial crisis since the Great Depression of the 1930s.

Population

• Study of Population is Demography.
• First Five populated countries: China, India, USA, Indonesia, Brazil
• World Population Day: 1987 July 11. The Population Day was declared on the date in which the world's population reached five billion people.
• World population crossed Six billion in 1999 October 12.
• World population crossed Seven billion in 2011 October 31.
• World Population as on 2020 is 7.8 Billion.
• UNFPA: United Nations Fund for Population Activities was established in 1967. Its headquarters is at New York.
• Lowest populated country is Vatican.
• Highest populated Continent is Asia.
• Least populated continent is Australia.
• Highest populated city is Tokyo (Japan).
• Highest populated island is Jawa.
• Country with highest density is Monaco.
• 100% urbanized city in the world is Singapore.
• World's first census: USA in 1790.
• The average life expectancy in the World is 71.0 years. It is 68.5 years for males and it is 73.5 years for females.
• The country with highest life expectancy is Monaco (89.63 years), Second position: Macau (84.46), Third: Japan (84.19), Fourth: Singapore (84.07).
• The countries with least life expectancy - Chad (49.07 years) , South Africa (49.48) , Guinea-Bissau (49.50), Swaziland (50.01 years).
• Gerentology - Study of ageing.
• Day of the Elderly - October 1
• UN declared 1999 as International Year of the Elderly or older persons.