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Economics - Fort Bend ISD
Economics - Fort Bend ISD

... behavior and decision making of entire economies. • A business cycle is a period of a macroeconomic expansion followed by a period of contraction. • One measure of a nation’s macro economy is gross domestic product (GDP). GDP is the total value of all final goods and services produced in a particula ...
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... social, political, economic. Economists often distinguish between “growth” and “development”. The former refers to the production of goods and services exchanged in markets, which is an ingredient, and an important one, in economic and social well-being. It needs to be considered, however, together ...
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... operations and depressed growth in loans offered by the commercial banks. The real rise of credit to the private sector is expected to fall to 4% compared to the 16% posted in 2007. In 2008, real interest rates on loans and deposits averaged 2% and -6%, respectively. Although in the first quarter th ...
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Transformation in economics



Transformation in economics refers to a long-term change in dominant economic activity in terms of prevailing relative engagement or employment of able individuals.Human economic systems undergo a number of deviations and departures from the ""normal"" state, trend or development. Among them are Disturbance (short-term disruption, temporary disorder), Perturbation (persistent or repeated divergence, predicament, decline or crisis), Deformation (damage, regime change, loss of self-sustainability, distortion), Transformation (long-term change, restructuring, conversion, new “normal”) and Renewal (rebirth, transmutation, corso-ricorso, renaissance, new beginning).Transformation is a unidirectional and irreversible change in dominant human economic activity (economic sector). Such change is driven by slower or faster continuous improvement in sector productivity growth rate. Productivity growth itself is fueled by advances in technology, inflow of useful innovations, accumulated practical knowledge and experience, levels of education, viability of institutions, quality of decision making and organized human effort. Individual sector transformations are the outcomes of human socio-economic evolution.Human economic activity has so far undergone at least four fundamental transformations:From nomadic hunting and gathering (H/G) to localized agricultureFrom localized agriculture (A) to internationalized industryFrom international industry (I) to global servicesFrom global services (S) to public sector (including government, welfare and unemployment, GWU)This evolution naturally proceeds from securing necessary food, through producing useful things, to providing helpful services, both private and public (See H/G→A→I→S→GWU sequence in Fig. 1). Accelerating productivity growth rates speed up the transformations, from millennia, through centuries, to decades of the recent era. It is this acceleration which makes transformation relevant economic category of today, more fundamental in its impact than any recession, crisis or depression. The evolution of four forms of capital (Indicated in Fig. 1) accompanies all economic transformations.Transformation is quite different from accompanying cyclical recessions and crises, despite the similarity of manifested phenomena (unemployment, technology shifts, socio-political discontent, bankruptcies, etc.). However, the tools and interventions used to combat crisis are clearly ineffective for coping with non-cyclical transformations. The problem is whether we face a mere crisis or a fundamental transformation (globalization→relocalization).
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