How the Economic Mechanism Works ?
How the Economic Machine Works ? - Ray Dalio Shuchi.P.Nahar The economy is like a machine. At the most fundamental level it is a relatively simple machine. But many people don’t understand it – or they don’t agree on how it works – and this has led to a lot of needless economic suffering. How the Economic Machine Works: “A Transactions-Based Approach” A sum of transaction is what builds the economy. Transactions are in human nature that creates three main forces that drive the economy. 1. Productivity 2. Short Term Debt Cycles 3. Long Term Debt Cycles An economy is simply the sum of the transactions that make it up. A transaction is a simple thing. Because there are a lot of them, the economy looks more complex than it really is. If instead of looking at it from the top down, we look at it from the transaction up, it is much easier to understand. A transaction consists of the buyer giving money (or credit) to a seller and the seller giving a good, a service or a