Tag Archives: Economy

Why Do They Spend What They Don’t Have?

I grew up with a piggy bank. My generation was told by parents that it is important to save “for bad times”.  When bad times never came and I grew up I started to get a different idea of saving and the value of money. Yet I never considered credit except for buying a home. This one belief is hard to change: “Don’t spend what you don’t have.”

Yet the business model of microfinance institutions (MFIs) is based on the wish Continue reading Why Do They Spend What They Don’t Have?

Advertisements

The Epic Race of Population vs. Economy

Let’s do a little thought experiment to visualize the challenges faced by many developing countries. Imagine a country with a population growth of 5% and economic growth of 3% per year. The standard of living in year 0 would be 100%. Where would that country be after twenty years?

Continue reading The Epic Race of Population vs. Economy