GTA5

Economics is the study of resources

Resources use in the best possible manner can be done with dynamic differentiation, a difficult mathematical analysis. Inputs in any production process are resource utilization and optimal use can be determined by a similar Optimal Control method. Opening and closing stocks and rates of exploitation need to be considered in the numerical.

Sustainable Development, renewable and non-renewable resources were few other topics that were discussed.

At Delhi School of Economics, I had a Resource Economics paper as 1 of my optional papers and had learnt this analysis there. Prof Jean Dreze was 1 of the Professors who taught us.

Resource Economics has several Game Theory models too. The recommended book was Kolstad.

Now to speak about resources in humans we like relationships with several kinds of people in all walks of life. We like to rebuild such relationships to progress in life. This is also a kind of resource management.
In popular terms today this is increasing our list of contacts or networking.

Human capital is the biggest resource.

Human resources or HR is prevalent in all organizations who does people management in offices to generate maximum returns from people’s performance in offices by boosting people’s morale.

Apple’s CEO Steve Jobs launched iPhone to turn around his flagging organization. Tata group had to evict CEO Cyrus Mistry to save the $100bn company from mismanagement.
Asia’s 2nd richest person Mukesh Ambani saw a great influx of capital in Reliance group after launching Jio which is a patent license of business model of Verizon, US Telecom Company.

Today technology is of huge importance and is a crucial resource to be put in use by people in work places. Computers, internet and applications are of great popularity and people harnesses these for maximum utility and profits. In my previous blog on Internet, I have explained the scale of internet which has flattened the world.

Capital or money too is an important resource to grow in life and everyone is working harder and simply running after it.

A small arithmetic: beginning value of investment = 500000, cagr = 40%, number of years= 40. Future value of investment = 350 billion.
You will become the richest person in this world.
Several mutual funds in India and US generate 40% returns. But in present times such returns too have reduced.

Reliance market capitalization is Rs 6 trn and SBI’s is Rs 2 trn, share prices are Rs 2500 and 10 times lower Rs 250. So SBI’s number of trades is 3 times higher than Reliance.

The operating margin of UCO Bank is 8 times higher at 33% than Reliance.

The total market capitalization of NSE is more or less equal to total assets of all the banks in India.

In economics profit is maximised when marginal cost = marginal revenue. Competitive markets are most efficient. Using relevant economic data production, cost, sales and utility can be optimized.

Treasury profits and returns from wealth management can be maximized by economic rules and theories.

So folks these were my random thoughts about Resource Economics.
I enjoyed the elective very much and hope to use it in my consulting career very intensively.



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Views expressed above are the author’s own.



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