Bank of America

Bank of America Stock Price Raising Rapidly

The “Bank of America” is an American multinational investment bank and financial services company. The headquarter of Bank of America is in Charlotte, North Carolina and also have central hubs in New York, London, Hong Kong, Minneapolis, and Toronto.


Bank of America was founded in 1998 through NationsBank’s acquisition of Bank America. Bank of America is the 2nd largest banking institution in the United States after JPMorgan Chase. Because it is the part of the Big Four, it services almost 10.73% of all-American bank deposits which is in direct competition with Citigroup, Wells Fargo, and JPMorgan Chase. Bank of America’s primary financial services is focused on commercial banking, wealth management, and investment banking.

Because of the series of mergers and acquisitions Bank of America they have built its commercial banking business by creating Merrill Lynch for wealth management and Bank of America Merrill Lynch for investment banking in 2008 and 2009. Because both the divisions carry the “Merrill Lynch” signage which is the former and often referred to as “Merrill Lynch Wealth Management” to convert itself from the latter. Bank of America, Merrill Lynch, and Merrill Lynch Wealth Management hold on to large market shares in their respective offerings.

Bank of America Credit Cards
Bank of America Credit Cards

At that time the investment bank is viewed within the “Bulge Bracket” because of the 3rd largest investment bank in the world, according to 2018. Bank of America’s wealth management department manages approximately US$1.081 trillion in assets under management (AUM) which is the 2nd largest wealth manager in the world, after UBS. On the other hand, in commercial banking Bank of America run but it does not necessarily maintain retail branches in all 50 states of the United States, but they do operate in the District of Columbia and more than 40 other countries.

Bank of America’s commercial banking footstep encapsulates 46 million consumer and small business relationships approximately at 4,600 banking centers and in 15,900 automated teller machines (ATMs).

Bank of America Stock Price (Latest)
Bank of America Stock Price (Latest)

According to August 2018, Bank of America has a $313.5 billion market capitalization which is creating it the 13th largest company in the world. Because it is the 6th largest American public company which also preserved $102.98 billion in sales reported in June 2018. Bank of America was also ranked 24th on the 2018 Fortune 500 rankings of the largest United States corporations by total revenue.

Bank of America was got the name of “World’s Best Bank” by the Euromoney Institutional Investor on their 2018 Awards for Excellence.

In October 1998, NationsBank of Charlotte secured BankAmerica, which was the largest bank acquisition in history at that time. When the NationsBank was the nominal survivor and, at that time, the merged bank took the better-known name of Bank of America.

Rather than, the holding company was renamed Bank of America Corporation and NationsBank, N.A. merged with Bank of America NT&SA to redesign Bank of America, N.A. as the remaining legal bank entity. Although, the merged company still has the headquartered in Charlotte, and also maintain NationsBank’s pre-1998 stock price history. Furthermore, all U.S. Securities and Exchange Commission (SEC) classifying before 1998, which are listed under NationsBank, not Bank of America. Also, NationsBank president, chairman, and CEO Hugh McColl maintain the same roles with the merged company.

Bank of America CEO-Brian Moynihan
Bank of America CEO-Brian Moynihan

Bank of America owns combined assets of $570 billion as well as 4,800 branches in 22 states. The Global Wealth and Investment Management (GWIM) division runs the investment assets of institutions and individuals. It involves the businesses of Merrill Lynch Global Wealth Management and U.S. Trust and represented by 21% of the company’s total revenue.

Bank of America is in the 10th largest U.S. wealth managers. Bank of America has over $2.5 trillion of client balances. GWIM also has five primary lines of businesses such as Premier Banking & Investments, The Private Bank, Family Wealth Advisors, and Bank of America Specialist.

Aarong Logo

Aarong- Leading the Handicraft Industry

Aarong is one of the largest fashion retail shops in Bangladesh which work under one of the world’s largest NGO. Aarong means village fair, and the concept of Aarong was to showcase the artwork and culture of villages of Bangladesh.

Aarong Handicraft Departmental Stores
Aarong Handicraft Departmental Stores

Ayesha Abed is the most instrumental figure of BRAC and the person behind Aarong. She initiated many of the significant activities, identifying and experimenting with various crafts that women could quickly produce at home. BRAC observed that women in Bangladesh increasingly involved in agriculture, but they are not getting paid. To create an alternative opportunity for these women, BRAC established its sericulture program in 1978 under Ayesha Abed.

Ayesha Abed Founder Aarong
Ayesha Abed Founder Aarong

The sericulture project helped the women in rural areas and created a “Silk” production in Manikgonj and “Nakshikantha” production in Jamalpur. But soon they realize that there are not sufficient buyers to buy those products neither there is a stable platform to market those products.


BRAC utilized this opportunity and created a platform where these women could sell products in urban areas and launched Aarong in 1978. To make the platform more efficient, they follow a retail process of several steps; first, a design team conceptualizes the seasons and then they sent that to rural artisans for production.

Aarong also does many skill-developing programs and workshops to make their artisan’s work more efficient. Gradually Bangladeshi handcrafted product demand increases and aarong achieved its vision and challenged the retail industry with its sustainable fashion revolution.

There are mainly two persons behind establishing aarong; Ayesha Abed and Dr. Martha Chen. Both of them joined Aarong on the same day in mid of 1975. Martha Chen and Ayesha abed work in the same workspace for five years. Martha Chen told that they used to call Ayesha by a nickname which is bahar and she also told that bahar was the heart of Brac until her early death in 1981. Martha Chen also added that they used to go for lunch in bahar house and abed, bahar and she used to discuss a lot about BRAC and on those countless lunchtimes, they seed many future programs of BRAC. During the five years when they work together, BRAC grew from 30 staff to 300 staff.

Aarong Team
Aarong Team

Moreover, also expended from one area operation to three; also shifted from rented headquarters to the BRAC first building. After the death of Ayesha Abed; her family, friends, and colleagues established the Ayesha Abed Foundation in her memory to promote the empowerment and employment of rural women of Bangladesh. In addition to being trained, women recruited by AAF benefit from a living wage and job security. The workspaces are often right at the doorsteps of the artisans, to enable them to mainly work from home while being able to look after their families. Through AAF, aarong created the opportunity for women empowerment.

Aarong’s targeted customers are from urban areas, and most are middle class and higher socio-economy. Aarong own 15 retail outlets in Bangladesh; nine of them are in Dhaka, 2 in Chittagong, 1 in Sylhet, 1 in Narayangonj, 1 in Khulna and 1 in Comilla. Not only had these Aarong’s Uttara outlet has been claimed the title of most significant one brand outlet. Aarong was also entering the global market; it opened a franchise in London in 2001. Through e-commerce Aarong also trying to enter the international market as well.

Aarong offers a huge variety of products including handprint, handcrafted, batik, screenprint, silk, embroidery, wall mats, curtains, showpieces, candles, dairy products, and jewelry, etc.

Aarong also recreated the locally manufacture fabrics like jamdani, muslin, and “Nakshikantha.” Aarong also uses the AZO and PCP process for dyes free cotton fabrics. Aarong also buys 75 percent of cotton fabrics from Madhobdi and over 70 percent of silk from Maldaha, which create a sustainable platform for so many artisan communities in Bangladesh.

Aarong started with the goal to support rural women and create a platform for them to utilize their skills and earn money also. The goal is still the same, just they are expanding their platform and making Aarong able to serve the global market.

In 2007 Aarong received fair trade certificate from the World Fair Trade Organization. Aarong celebrates its 30th anniversary with a fashion gala and exhibition series in 2008. In 2009 Aarong received best brand awards from Superbrands. Aarong also received a UNESCO award of excellence in 2012.

Bangladesh Budget (2019-20): Brief Analysis

The expense of the proposed 49 the budget with the slogan “Time is ours, Time for Bangladesh” is
assumed to be 5 lakh 23 thousand and 190 crore taka. The target of income is determined as 3
lakh 81 thousand and 978 crore taka. That means, the upcoming fiscal year will end with a
deficiency of 1 lakh 41 thousand and 212 crore taka. Though this is the first budget for the new
finance minister, for the government it is the consecutive 11 the budget.

Let us have a look at the budget of previous times :

2009-10: 950000
2018-19: 4,64,573
2019-20: 5,23,190

What is there in the budget for the people?

Subsidy for foreign remittance: there is good news for the immigrants in the budget.Now
they get 2 percent subsidy on the amount they will send to the country.

Discount in the agricultural equipment

The farmers need not pay vat on the local
agricultural equipment. There will be a reduction of tax from the harvesting equipment also.

Crop Insurance

According to the finance minister, there will be crop insurance for the


There will be more discount on the tariffs of the raw materials needed to
manufacture cancer medicines.

Pension for all

In the new budget, the finance minister has talked about forming a
committee for the project pension for all.

Registration of the cars

10 percent of the tariff has been applied to the registration of all the
vehicles, in taking the route permit and ownership certificate and renewal of all

More Facilities for the Readymade garments

The government will provide a subsidy of 1 percent for the readymade garments and has allotted an amount of 2 thousands 825
crore taka for this sector.

New Entrepreneur

In the budget, an amount of 100 crore taka has been allotted for the new

Firefighting Equipment

Since no of fire accidents have increased the government has
provide a grace on the imports of the goods related to firefighting for hospitals, hotels
and educational institution.

Daily Goods

In the budget, the price of sugar and oil will increase. More tax is imposed on
imported sugar and vat has been applied the oil.


The proposed amount of this fiscal. (Tk32,101 crore) is 9.4% more than the previous fiscal. Out
of the total amount, Tk1,480 crore will be used for the development works. Of the overall
allotment, Tk30,765 crore has been set aside for defense services while Tk1,928 crore has been
appropriated as operating cost of the Ministry of Defence and other services.Tk38 crore has
been set aside as operating costs of the Armed Forces Division which was Tk35 crore in the last

Positive sides of the budget

For the next fiscal year, an amount of 2,11,683 crore taka has
been declared for the development budget, among which 2,02,721 crore taka has been
allotted for annual development program. That means the development budget is 8.25
% of the total GDP. Other positive points are the allotment of 100 crores for the new
entrepreneurs and 2% of subsidy for the foreign remittance. Which will help the
unemployed young peoples a lot? In addition to it, the removal of vat from the goods of the
women entrepreneurs and increase of allotments for social security and educational
sectors are some good steps also.

Negative Aspects of The Budget

There has been no aid or subsidy for the farmers who work
hard to produce our food. The crop insurance will only help them in natural calamities
but not in the regular days. The governments want to make Bangladesh a digital country
but imposing an extra 10% tax on the import of smartphones and laptops. There has been a
huge opportunity of making the black money to white by investing them which is not

Though the prime minister is saying that they have taken the step to stop
money trafficking and to increase the amount of investment in the country
In the budget of this year, the main challenge is the implementation of the budget and facing
the deficiency of the budget. The main challenge for the finance minister is the
implementation of the budget by reducing the corruption and wastage of money. It is a
matter to watch how he faces the challenge.

Antitrust law and Market Structure

Antitrust law and Market Structure

Antitrust law, practice, and policy are the outcome of a long and productive interdisciplinary collaboration between law and economics. This topic addresses an essential perspective of that collaboration: the practice of courts can and should produce two forms of education in experimental industrial organization economics, as the academic discipline has emerged over the few decades. The examples, related to the practices, concentrate on the US experience, which is known best. With confidence, it can be stated that the overall considerations discussed implement to any competition policy administration.


The first body of economic knowledge discussion includes techniques of differentiating among alternative analyses for market results or firm conduct. It is termed as the obstacle of ‘‘identification’’ in experimental economics. Descriptions of how courts can implement what economists acquired about identification to the problems of establishing markets and discovering whether market power has been utilized are made. The same analytic issues appear despite whether the evidence on the following ideas is quantitative or qualitative. The second consistent body of economic knowledge originates from the empirical economics research literature. It is taken as a complex. That literature demonstrates that inequalities among industries are necessary, making the sector a suitable unit of analysis for labeling economic concerns associated with competition policy. A comparable outcome reached a long time back in antitrust law when market definition grew central to the intelligent critique. However, as explained, the research literature goes further in a process which has not yet been fully recognized in antitrust: it suggests generalizations over closely related industries which can be exploited to help assess proof and settle cases. We conclude by considering ways of enhancing the institutional range of the judicial system to utilize the following two concepts of economic learning. Moreover, these include a possible limited role for neutral financial specialists in prosecution and a role for the antitrust enforcement agencies in recognizing and classifying appropriate generalizations about industries from the empirical economic literature to make that knowledge accessible to courts.


More than the most legal fields, antitrust law looks like a boundary of economics. Today, competition policy decision-makers rely exceedingly on economic theories, evidence, and philosophy. Economic terms like marginal cost, oligopoly behavior, and elasticity of demand have grown part of the antitrust language. The essence of economics is most apparent when antitrust cases are resolved in litigation. In picking individual cases, courts routinely engage a comprehensive economic analysis into the creation of competition and the effect of stimulated practices on that particular competition. It is most apparent in merger analysis, where modern examples are diverse.


Economic evidence, reasoning, and, concepts are fundamental to modern antitrust analysis outside the merger context as well. In antitrust litigation as well as enforcement agency investigations, the expansion, and analysis of proof about conditions of entry and industry market power, and about the likely impacts of a merger or business practice, are essential practices in applied economics. Economic reasoning also strikes a significant role in constructing legal rules. When economists invent new tools and methodological strategies, the antitrust department pays great attention. For instance, as advances in computerization have promoted the collection and manipulation of data, and as new observational methods of distinguishing and measuring market power have been developed, practical economic tools have frequently been applied to estimate market power in antitrust litigation and implementation. Just as antitrust infused with economics, industrial organization economics— the economic fields most closely associated with antitrust— turned its regard to the legal system. Many of the problems and issues marked in the research literature on industrial organization economists, over the past few decades, have been proposed or enclosed by antitrust proceedings.


In one extensively used undergraduate industrial organization text, for instance, the index listing legal cases most including antitrust goes on for three pages. Moreover, many academic economists undertake litigation-related consulting projects involving antitrust issues in the industrial organization field.  Most modern competition law regimes have economic goals, such as promoting economic efficiency or consumer welfare, in whole or substantial part. An emphasis on economic aims unavoidably brings economics to sustain leading courts to frame antitrust issues in terms of economic concepts. For example, competitive effects, entry, market power, and efficiencies, and to interpret the detailed facts involving a particular industry and specific challenged practices through the application of the logical framework is supplied by economics. Courts have become analytically severe about the effects of the challenged conduct on the competition: classifying the market or markets in which competition has or will likely cripple and the device by which the questioned regulation does so. In US antitrust law, the application of an economic framework was supported by the development of the ‘‘antitrust injury’’ theory, which requires plaintiffs in many cases to explain how their damage flows from the antitrust violation they have claimed. This doctrine executes the essential analytical analysis from economics between protecting competition and merely protecting competitors. It secures that plaintiffs may not recover damages simply because they have been harmed.


The antitrust investigation also displays the interests of the legal system, at times leading judges to approach issues in ways that differ from how economists might act on their own. For example, courts may undertake the step of defining markets even in settings where the competitive influences of business conduct can be regulated straightly; settings where economists might discover market definition irrelevant. Economists usually prefer to bring all the available information to sustain, whereas at times courts choose truncated analyses that eliminate specific relevant inquiries to reduce the costs of controlling the legal system and to specify clear and simple precepts that give more direction to courts and firms. The legal system will not fine-tune environmental industries to obtain specific economic goals through regulatory purposes, as some economists have advised. Antitrust policy accurately rejects common suggestions that courts or regulators try to determine a particular price be obtained, a specific competitor come in, or that an appropriate industry structure is efficient. The legal system – instead, to the extent possible – believes the competitive mechanism to attain economic goals. For instance, merger law does not endeavor to identify and create the most efficient industry structure. It solely attempts to discover whether a particular merger in an industry would hurt competition.

Relating Price to Market Structure

The apparent magnitude of demand substitution in the event of a price rise is sometimes evaluated quantitatively, using a modified type of identifying experiment, which involves changes in the market structure. One example of such an investigation stands if there is a cartel that

was an influence for only a given period or only in particular places. A similar identifying experiment can be used if the market structure differs across comparable locations or changes over time. If prices rise when the number of firms selling the products in a candidate market drop, then it may be sensible to assume that a hypothetical monopolist of those products would find it profitable to raise the price at locations where the number of firms has not declined. This approach was employed in the Staples litigation to interpret market definition and the likelihood of one-sided competitive effects of the merger.

A correlation of prices across markets, which are thought to be alike except for differences in market structure, likewise does not invariably need complex data analysis. For example, the court opinion in Staples assesses this evidence-based solely on party pricing documents, without relating to the econometric evidence in the record interpreting pricing orderly. The classification problem in these survey contexts, whether the evidence is qualitative or quantitative, would be approached with an argument as to why the reported buyer responses are reliable guides to future buyer conduct under the conditions likely then to prevail in the marketplace. The purpose of reasonableness standards in antitrust decision-making and the modern empirical literature in industrial organization economics have an essential commonality: both treat the industry as the appropriate unit of observation. Both fields acknowledge that a one-size-fits-all approach to interpreting business strategy won’t do since so much disparity in outcomes awakes from factors specific to each industry. Both antitrust law and industrial organization economics have come to recognize that related industries often are adequately similar to present useful guidance. Many of the same legal and economic questions arise, for example, during understanding firm behavior in markets which products are sold at retail, in markets for high-tech products sold in aftermarkets, in markets for primary metals with cyclical demand, and in any number of similar categories.


One significant difficulty for both antitrust analysis and empirical industrial organization economics going forward is to utilize similarities among related industries. Focused inquiry involving the industry besides the firms under study is not acknowledged in antitrust to the extent it is perceived in economics. For instance, it remains broadly known that product-differentiated industries as a class present specific general analytical problems and behaviors. However, several economists would argue that any particular product-differentiated industry could be examined for market power, competitive effects, or demand substitution without industry-specific analysis. What the research literature has done is to identify a set of industries in which broadly the same tool kit can be used to examine market power. Within this set of industries, an inquiry that looks only at demand substitution to address the market definition and identify market power, ignoring supply-side factors like costs and strategic conduct, is in general likely to be mainly right.


Econophysics is the utilization of the laws of physics to the research of financial markets, under the theory that the business world functions as a sea of electrons or a group of water molecules that interact with each other. Econophysicists are securing a questionable inauguration at tearing up some difficult economics with modern tools of mathematical physics and the current discoveries in learning turbulent practices and decreasing them to a few elegant general principles.


The term econophysics was presented with similar terms, which depicts applications of physics in various fields, such as astrophysics, geophysics, and biophysics. Econophysics was first introduced by the famous theoretical physicist, Eugene Stanley in 1995, at the conference on Dynamics of Complex Systems. It was held in Calcutta, later recognized as Kolkata, as a mandated meeting to the Statphys 19 conference in China.  The field of econophysics uses the theory of probabilities, and mathematical methods emerged in statistical physics.  It was done to study statistical properties of twisted economic systems consisting of a substantial quantity of obscure units or population (firms, families, households, etc.) made of small groups or humans. Especially significant in defining econophysics is the apparent disparity between statistical physics and mathematical statistics in its center, methods, and results. It is a sociological explanation, based on physicists who are working on economic problems.


Why is econophysics not a multidisciplinary science but an interdisciplinary one? Multidisciplinary implies discrete disciplines in the study, as with an economist and a physicist speaking to each other.  On the other hand, interdisciplinary indicates a narrow specialty formed out of elements of each separate discipline, for instance, a “water economist” who understands hydrology and economics. Multidisciplinary discipline remains usually defined in terms of the ideas or techniques that it deals with, for example, political economy or biophysics. However, transdisciplinary recommends a broader combination of methods and ideas from the disciplines involved.  It is the term approved by the ecological economists for what they are trying to develop. Yakovenko (2009) stated that econophysics is an “interdisciplinary research field applying methods of statistical physics to problems in economics and finance.” It is yet another, more relevant and synthetic definition of econophysics.


There are some essential differences between econophysics and sociophysics.  The first emphasizes the confined subject of the economic behavior of humans, where quantitative data is accessible, while the second looks into an extensive range of social issues.  However, the barrier between econophysics and sociophysics is not transparent, and the two fields have good harmony. Econophysics is still a foreign word even after 17 years. Moreover, it is used to represent work done by physicists, in which financial and economic systems remain used as complex systems. Thus, for physicists, studying the economy indicates studying a stock of data on a well-defined complex system. The contemporary way to depict econophysics is in terms of the concepts it includes, in effect physicists doing economics with theories from physics. This medium demands the question of how the two disciplines compare to each other, and it describes interest rates and changes in stock market prices. These theories map analogies to turbulence, earthquakes, fractals, sand piles, radioactivity, energy states in nuclei, and the structure of elementary particles.


Technologically, econophysicists have incorporated their slot by creating models much more straightforward than most economists now choose to consider. They even used a reasonable association between economic or financial terms and crucial points in statistical mechanics, where the acknowledgment of a physical system to a small external disturbance becomes eternal. It is because all the subparts of the system answer accordingly, even though some economists claim that it is a disrespect to the intelligence of the market to conjure the presence of a noise term. Many diverse approaches and techniques from physics and the other sciences have been examined by econophysicists, including pattern recognition, chaos theory, and neural networks. Another impressive definition holds econophysics as a scientific method to the quantitative economy using models, ideas, conceptual and computational techniques of statistical physics. In the current years, many physical hypotheses like the theory of turbulence, random matrix theory, scaling, or renormalization group, were successfully applied to the economy. These hypotheses gave a boost to advanced computational techniques of data analysis, risk management, artificial markets, macroeconomy. And thus econophysics became a traditional discipline comprising a vast spectrum of obstacles of the modern economy. A comprehensive description of econophysics explains it as a unique area, acquired recently by the interaction between economists, physicists, and mathematicians, which implements ideas, methods, and models in statistical physics and complexity to interpret data from the economic phenomena.


Econophysics is nothing more than the combination of physics and economics. It is a link between the two entirely separate disciplines that lie within the individual behavior displayed by financial markets, similar to other recognized physical systems. Econophysics aims to illustrate the models of the universal practices of an exchange, as a free system, where new external data remains merged with new investments.  There are different types of econophysics as well. One is an experimental or observational type, which attempts to analyze real data from real markets and make sense of them.  Another is an ideal type, which tries to attain microscopic models giving some quantities of good agreement with the experimental evidence. The first econophysics models, which were published by physicists in a physics journal, were those of Takayasu et al. (1992) and Mantegna (1991), though they produced them several years ahead. But in 1964, Stigler from the Chicago economics school had published a Monte Carlo simulation of a market already. In 1989, the Nobel laureate of Economics H.M. Markowitz with Kim, published a model about the Wall Street crash in 1987, with two types of investors, similar to many succeeding models of physicists.  After the year 2000, econophysics evolved enough to acknowledge generalized utilization. This field is sometimes known as Econo-engineering.


Without being likewise determined, econophysics continues to be the science that utilizes models – taken especially from statistical physics – to represent some economic features, an interdisciplinary research field, applying theories and methods initially generated by physicists to solve problems in economics. Generally, those include stochastic factors or conjecture and nonlinear dynamics. Primary tools of econophysics are probabilistic and mathematical techniques, often taken from statistical physics. Most econophysics models, papers and approaches that have been written so far indicate to the economic methods which comprise systems with a wide range of elements, such as financial or banking markets, production or product’s sales, stock markets, incomes, and individual incomes. In these cases, statistical physics approaches are mainly applied.




Today it is feasible for methods and concepts of statistical physics to have substantial influence in economic thought. However, it is also likely that economical methods and ideas can impact the physics thought as well. The process of econophysics illustrates its central intent in applying a system of statistical physics and other mathematical practices implemented in physics to economic data and economic processes. Why can the processes and procedures from statistical physics be favorably executed to social, economic, and financial problems? Could it be the result of the great experience of physicists working with experimental data? Does it give them a sole advantage to reveal quantitative laws in the statistical data accessible in social sciences, economics, and finance?  Is econophysics indeed bringing fresh insights viewpoints, which are likely to transform the old social sciences and classical economics?


The study of dynamic systems remains substantially based on expressing them in terms of (partial) differential equations which are moreover worked out by analytical processes (or numerically). However, this is somehow opposite to our intuitions: we never come across the life density distributions of our cars, utility functions, friends, etc. We have transformed integrals into real numbers by equalizing over specific areas. These real numbers can be achieved either by averaging over high enough volumes or over a prolonged period of times. Statistical physics is a framework which lets systems, consisting of many independent particles, to be rigorously examined. Inside econophysics, these procedures remain implemented on economic particles, namely investors, traders, and consumers. Markets then observed as complex systems (macroscopic) with an enclosed structure consisting of many of these particles (microscopic). These then interact to produce the systemic features (the microstructural elements are reactive in this circumstance, as discussed already, thus resulting in an adaptive complex system). Initially, when the physicists attempted to analyze financial markets, by applying the method of statistical physics, they did not look into these markets as individually exceptional examples of complex systems. Few of them have even believed they are discovering laws or some establishment proof in the pattern of the scaling laws that Pareto first studied.


In contrast, that has discovered a much broader category of economic observables. In all honesty, the establishment evidence found is not a steady or a conclusive one, because all the markets act portrayed by nonstationarity. It is a common feature of complex adaptive systems. McCauley (2004) asserted that “the empirical distribution is not fixed once and for all by any law of nature [but] is also subject to change with agents’ collective behavior.”


Theory verifies that the attributes of complex systems include three necessary conditions:

  1. Complex systems must carry many subunits (the exact number left vague).
  2. Subunits must be interdependent (at least at some point of the time).
  3. Interactions among the subunits must be nonlinear (at least some of the time).

These properties are said to be emanating when they amount to new complex or systemic composition, and a complex adaptive system adds the following requirement:

Individual subunits adjust their properties and behavior concerning a dynamic environment resulting in the generation of new systemic characteristics.

Finally, the organizing adaptive complex system adds another necessary condition:

Individual subunits alter their properties and behavior concerning the features and functioning of the unit system they jointly determine.  Sometimes they do it by including a network performance model for what is pointed to, by physicists, in particular, as complex networks.


In comparison to classical statistical thought, econophysics has disclosed that heterogeneous in reality is explained with homogeneous in theory. And this is the principal role of the method of analytical physics – to consolidate and clarify economics. Some of the success stories related to econophysics include:

More than anything, physicists have encouraged to discover empirical facts about financial markets. For instance, the probability of significant market movements (up or down) contracts, following an inverse cubic power law in many distinct markets (stocks, derivatives, currencies, bonds, and in many nations). Aforementioned is a straightforward mathematical pattern. It apprehends in particular form, the general phenomenon of large market outbreaks much more commonly than would be anticipated by ordinary Bell Curve statistics. These “fat tails” appear to be a more or less universal result. Work by physicists has also discovered other nonexclusive market patterns, such as the self-similar structure of market volatility.


Did physicists inaugurate this kind of work? Of course not. The Father of Fractals Benoit Mandelbrot found the first proof for fat-tailed patterns in the early 1960s. Moreover, Nobel Prize winner Eugene Fama even wrote about that work long ago in his first paper. But the study by physicists has made our knowledge of these empirical routines much more accurate. This study is essential for proper risk management, among other things. Furthermore, to create theories explain how markets work, one first needs to ascertain exactly how they work with data.  In this way, they can explicitly establish what needs to be solved.


Physicists have also distinguished informative links between markets and other natural aspects. For example, in the period following a massive market crash, markets show lingering activity. Also, that obeys the famous Omori law for earthquake aftershocks (events become less likely in uncomplicated opposite proportion to the time after the main shock). Such connections impose that the definition of such market dynamics may well not be dependent on facts which are particular to finance and economics. Therefore, more extensive dynamical principles may be involved.



Microeconomics and Macroeconomics


Microeconomics and macroeconomics are two diverse viewpoints on an economy. Microeconomics focuses on the individuals, firms, and industries of the economy. In microeconomics, we focus on how individuals’ choices are determined, what those choices determine and for whom do we produce goods and services. Macroeconomics looks into the economy as a whole, focusing on areas like unemployment, inflation, and growth in the standard of living. It has two types of strategies for these areas: monetary policy and fiscal policy. Microeconomics and macroeconomics are not distinct topics, but rather corresponding perspectives on the complete subject of the economy.


A Good Look Into Microeconomics

Microeconomics is the study of economic inclinations, or what is prone to happen when certain choices are made by individuals and how those choices affect the factors of production. Given it is essentially a completely advanced and a normatively settled science, microeconomics does not necessarily try to demonstrate what should happen in a market, rather, it only explains what expectations should be kept if certain conditions are altered. At its basic, microeconomics describes what is to be anticipated if valid situations change. Hence, if a manufacturer increases the prices of smartphones, microeconomics addresses that consumers will tend to buy fewer smartphones than they have before. In case of a major collapse of a copper mine in South America, the price of copper will tend to rise, as the supply will most likely be restricted. Microeconomics is based on a free business economy, which depicts the business is independent to take decisions.  The key concepts of this study include:

(1) Demand, supply and, equilibrium – which deals with price determination in a competitive market at its basic; if depicted that the price demanded by the consumers is equal to supplies produced by the producers, then we conclude that the economy has reached equilibrium.

(2) Labor economics – the necessity of comprehending the dynamics of the wage labor market, looking into employers, suppliers and, attempts to understand the pattern of income, wages, and employment.

(3) Cost of production – which talks about how the price of goods and services is determined by the cost of resources utilized for making it.

(4) Production theory – dealing with conversions of inputs into outputs and vice versa.



Macroeconomics is the study of economics which greatly looks into the behavior and performance of aggregate variables and the issues which impact the whole economy. It comprises regional, national and international economies. Moreover, macroeconomics covers unemployment, poverty, general price level, GDP (Gross Domestic Product), imports and exports, economic growth, globalization, monetary/ fiscal policy, all of which are the key factors of an economy. It aids in determining the numerous problems of the economy. Thereby, it enables efficient functioning.

Numerous goals can explain an economy’s macroeconomic conditions: development in the standard of living, reduced unemployment and inflation, most importantly. We might as well wonder how a macroeconomic policy can be utilized to pursue such goals.

  1. Monetary policy: This approach involves policies that affect interest rates, bank loans, and financial capital markets. It is conducted by a nation’s central bank. For example, in the United States, this is the Federal Reserve.
  2. Fiscal policy: This process includes taxes and government spending, which are determined by a nation’s parliamentary body. For instance, in the United States, this is the Congress and the executive branch, which instigates the federal budget. These are the core tools the government has to work with.

Microeconomics Principle

It is important to acknowledge the necessity of both microeconomic and macroeconomic perspectives. As an illustration, let’s consider a tricky study of a biological ecosystem like a lake. An individual, who is out to study the lake, keeps in mind to focus on specific topics such as certain types of plant life; the features of particular fishes; or just the trees neighboring the lake.

Another individual, who is also out for the same motive, might just straightly take an overall view instead, and reflect the entire ecosystem of the lake; what feeds on what, how the system controls and balances itself, and what environmental pressures affect this balance. The reason for this illustration is to prove the fact that both of these methods are useful.

Both approaches are examining the same lake, but the viewpoints are unlike. Similarly, microeconomics and macroeconomics study the same economy, but each has a different perspective. Whether you are considering lakes or economics, it is quite important that the observations of the micro and the macro blend well with each other.

In economics, the micro-decisions of discrete businesses are inclined by whether the macroeconomic economy is healthy. For instance, if the overall economy is emerging, firms will be more likely to employ workers. Consecutively, the performance of the macroeconomic economy will stay dependent on the microeconomic decisions made by individual businesses and households.

Key Differences Between Micro and Macro Economics


  • Microeconomics examines the particular market segment of an economy, whereas Macroeconomics examines the entire economy, which covers quite a few market segments.
  • Microeconomics emphasizes on individual economic units. On the other hand, the emphasis of macroeconomics is on aggregate economic variables.
  • Although microeconomics is enforced into operational or internal issues, macroeconomics deals with environmental and external issues.
  • Microeconomics works with individual firms, products, industries, households, wages, prices, and so on, while macroeconomics deals with aggregate factors like national income, national output, price level, etc.
  • Microeconomics covers concerns of particular prices of commodities and how those commodities affect its quantity demanded and quantity supplied and vice versa. However, macroeconomics majorly covers concerns of unemployment, monetary/ fiscal policies, poverty, and international trade, of an economy.
  • Microeconomics determines both, the price of a particular commodity, as well as the prices of complementary and the substitute goods, whereas macroeconomics is useful in maintaining the overall price level.
  • While studying any economy, microeconomics takes a bottom-up approach, whereas the macroeconomics takes a top-down approach into attention.
  • In microeconomics, unrealistic assumptions are put up as a basis such as, there will be full employment in the society. That is very unlikely. However, in macroeconomics, it is assumed that the economy may be in a state of disequilibrium (boom or recession) for a longer period. In addition, with high possibility, what is true for aggregate may not be true for individuals.
  • Microeconomics tends to work from a theory first. Nevertheless, macroeconomics places greater importance on empirical data and attempts to explain it.
  • Investors can use microeconomics in their investment decisions, whereas macroeconomics is utilized as an analytical tool mainly to craft economy and fiscal policy.

microeconomics and macroeconomics


As microeconomics focuses on the distributions of scarce resources among the individuals, macroeconomics analyzes how these distributions of scarce resources are to be done amid several people, so that it makes the optimum use of the limited resources. Microeconomics studies about the independent variables more. At the same time, macroeconomics studies the aggregate factors. With these observations, we can depict that microeconomics and macroeconomics are interdependent. In other words, microeconomics and macroeconomics both concentrate on the allocation of limited resources. Both disciplines study how the demand, for assured resources, interacts with the ability to supply that good, so that it ends up determining how to optimally distribute and allocate that resource amid various consumers.


To sum up, microeconomics and macroeconomics are not contradictory by nature. Instead, they are complementary. As every coin has two sides, microeconomics and macroeconomics are also the two sides of the same coin, where one’s drawback is the other’s advantage. Hence, in this way, they run the entire economy.

The area of application is one of the most significant things, which makes microeconomics and macroeconomics different. In microeconomics, an economist might focus on how the supply gets shifted by the tax in a specific market, or how a firm’s decision making gets influenced.

At the End

In contrast, a macroeconomist will simply consider whether the standard of living for all of the economy’s participants will be improved by tax translation. Another way to phrase the differences is to state that microeconomics is the study of markets, while macroeconomics includes the total economic activity. This key difference modifies how the two approach economic circumstances. Microeconomics does reflect on macroeconomics – which forces impacts on the world- but it focuses more on how those forces impact individual firms and industries.

Social Security

Importance of Social security & Financial Planning

In the United States, the program of public retirement is known as Social Security. This social welfare and insurance plan, regulated by the U.S. federal government, pays benefits (retirement income, disability income, social security Medicare and Medicaid, and death and survivorship benefits), known as social security benefits to the disabled workers, retirees, and survivors of deceased workers. As much as most of us highly rely on the social security program, its advantages alone may not be enough. The ability to work decreases as individuals start to age, but individuals tend to continue to live life anyway, even when they are no more willing to work. However, it has been found that there is significant evidence in the literature about the social security department and its contributions being valuable. Social security applications can commonly be associated with the welfare state’s insurance function and the reallocation function, as far as pensions are in concern.

Financial Planning Definition

When we are young and ages away from retirement, we hardly think about contributing to our savings as we think it is wiser to spend the money elsewhere. Experts say that we need to contribute at least about 70% of our peak earnings to our savings, as that will benefit our standard of living during retirement. However, we also need to establish a financial plan for considerable life events, which includes long-term care, medical needs and altering family dynamics.

financial planning

Problems Related to Financing Social Security

We might wonder how these social security benefits are financed and what might be the problems related to financing social security. First and foremost, it is crucial to carefully plan how the benefits are to be financed. Once a new scheme is enlightened, it is important to look at how the cost of the proposed benefits is behaving and, whether these costs can be afforded. Be it a simple occupational pension scheme or a means-tested system, every type of scheme is financed virtually. Nevertheless, the provident funds are the only exception to this. The employers’ and the workers’ contributions are combined and collected so that they are available in the future. Moreover, we need to make sure there are no adverse effects on a worker’s ability to meet his or her daily expenses.  The profitability of a business and one’s ability to keep employers at work is also a matter of concern.

Financial calculations

The general average premium system is comparable to social security, as it determines a constant rate of resources.  On the other hand, there are the annual assessment or pay-as-you-go systems in which, chiefly speaking, the annual income and consumption are similar. In practice, a transitional, partially funded system is normally applied with accumulated capital, not for expenditure, but for the sake of the interest. That way it yields. The contribution rate remains stable over successive intervals of time under the scaled premium system. Finally, the assessment of constituent capital system is largely enforced to finance pensions arising under employment injury branches of insurance. Here, the calculations are made to equate each year’s income with the capital value of pensions in that year. In other words, each year’s contributions, invested with interest, should be adequate to meet the liabilities issuing in that year.

Financial Calculations & social security benefits

Social security, Saving & Finance

The importance of having legitimate financial reviews of schemes is, indeed, quite necessary. Each approach has its particular characteristics and applications, though one or more may be convenient for the different types of benefit probabilities.

Social security has been challenged with major financial competence issues for many decades. The current workers are contributing to today’s payments from their payroll, and it remains tentative whether they will have money available during their retirement period. The future of social security, therefore, remains in uncertain threats of becoming insolvent because of factors such as a booming population entering retirement age, longer life expectancies, and inflation. Nonetheless, the continuation of social security benefits remains certain, as almost all Americans are privileged and most depended on it. Furthermore, the modifications on the benefits are approved by the higher officials in Congress.

Information Economics - Un Marinero

Start-up and Information economics Updated 2020

The world runs on information, all kinds of information. The economic analysis of all information is known as Information Economics, just as its name suggests. All the information you and I have and also don’t have been analyzed for economic purposes. Therefore, Information Economics, a branch of microeconomics, picks out different kinds of information, differentiates between them, and relates them to the economy, points out problems and looks for their solutions.

Fundamentals of Economics

Economics is fundamentally about solving the problem of scarcity- limited resources but unlimited wants. This problem leads to consumers having to make a choice because they do not have enough resources to satisfy all their wants. Another thing that consumers take into account is a utility, which in simpler words can be known as satisfaction. Consumers will choose the product that gives them the highest level of satisfaction. Now, to make that choice, the person needs to know about the product to know if it is possible to afford it and also if it gives the highest level of satisfaction. Information Economics is basically all about that- information necessary to get to the highest utility, information about the product such as price, and how the decision made with this information affects the economy, this is why Information Economics is important.

An Economy reaches allocative efficiency when the demand and supply curves meet. The corresponding quantity of that intersection point is the allocative efficient quantity. However, in a market economy, it is rarely the case. In these economies, market failure occurs due to the overproduction of demerit goods or underproduction of merit goods. The main reason behind this is asymmetric information. The definition of asymmetric information can be said to be insufficient information, simply put, or information failure. Merit goods are goods that are good for people, and demerit goods are bad for people, just as the names suggest. However, most people do not know that it is good for the;m therefore under consume merit and overconsume demerit goods. This then leads to the under or overproduction.

Information Economics Updated 2020

As said earlier, Information Economics picks out problems and looks for its solution. Therefore, this asymmetric information or information failure is the problem that is to be analyzed and solved. Now, this is why information economics is so important. Without this branch of microeconomic,s it would not be possible to analyze these problems! Coming back to solving the problems of asymmetric information, two ways are signaling and screening.

Asymmetric Information and Information Economics Updated 2020

To discuss the solutions, let us first talk about what might happen due to asymmetric information. Suppose, Information Economics and healthcare. You have symptoms of dengue, but you do not know the adverse effects or the symptoms of dengue. Will you go to the doctor or the hospital? No. This means that underconsumption is happening just because of a lack of information. These kinds of problems are analyzed in information economics and can be solved by signaling.

Overview – Signaling

To explain signaling, let us consider the most common example that is about employers and employees. When employers are looking for employees, they are looking for certain qualifications in the prospective candidates. However, employers need to know that people have those qualifications. That is done by informing the employers that they have obtained a certain degree from a certain college, by adding that to their cv, which lets the employers know about the qualifications. This adding of that information is signaling.

Basically, the person who the information about informs the concerned authority that “I have these qualifications” to ignore information failure. If there were no such information given, then the employers would not know enough information about the candidates, leading to a very lengthy, tedious and inefficient recruitment process.

Overview – Screening

To explain screening, let us consider plane tickets. Plane tickets nowadays are bought on websites. On the website,e many options are given to a passenger to choose from, from the cheapest options to the most expensive ones. Now, without any further information, a passenger would either buy the cheapest one or just become confused and not buy at all. But, because of screening, the information will be displayed on the websites. Information that says what offers each price comes with. This makes it easier for the passengers to choose because now they can just see options and what is available and choose the most desirable ones. Otherwise, there may have been a lot of inefficiency and chaos.

Example- Anti-tobacco Campaign

The Government uses different policies to minimize the effects of asymmetric information. One example is by introducing the anti-tobacco campaign by displaying its moral, health and social hazards. Another way could be making the citizens more aware of health issues, the importance of education, etc. In short, tall policies need information, no matter what it is, and that is where information economics comes in, and that is why it is so important.

Information Economics and Government policies Updated 2020

Information Economics and government policies are related in more ways. Information Economics is also needed to understand the concept of efficiency, full employment of resources and price stability. Efficiency requires information and needs proper information on price, demand, and resources. For example, to be efficient, a company needs to produce to the fullest with the lowest possible costs. For this, it needs to know about what resources they need, their prices and what prices are the consumers willing to buy at. The proper information regarding these will help them produce to the fullest, to meet the right amount of demand at the minimum cost.

startup & economics

Importance of Economics in Start-up Updated 2020

Just like efficiency, firms also need to know how much resources are available in the economy. To know that, they need information about how much of the necessary resources available in the economy to exploit the resources to the fullest. For example, a firm needs labor but is not aware of the unemployment in the economy, thus not trying to look for it, but it would if they knew about it. The other factor, price stability is also highly affected by information economics. Price stability is keeping inflation at its lowest, maybe, 1% and also not inducing deflation.

For that, the Government needs to make certain policies, such as fiscal policy or monetary policy. To decide on what policies to use, they need information about the inflation level and what is causing it.

At the end

Therefore, throughout this paper, we can see what and how important information economics is and how it is applied in the economy. To summarize the whole thing, to flourish, the people in an economy has to have clear information about it. From choosing what to eat for lunch to choosing important Government policies, information is needed and to analyze what kind of information is needed and to what extent, information economics is needed.