barra advisory group logo

Insights

Change is constant. Adapt through learning and courageous actions.

Why Macroeconomics is Important for Entrepreneurs and Business Leaders

The most valuable of all capitals is that invested in human beings.

- Alfred Marshall

Economics is the study of how society manages its scarce resources

- Gary Becker
The fate of any business is intrinsically related to how it responds to the demands and pressures of internal and external forces. Internal constraints encompass various factors, including but not limited to people, culture, strategies, execution, sales, and the ability to maintain a healthy list of returning customers. Among the most crucial external forces impacting a business' fate are macroeconomic trends, which determine the contexts in which a business is born, nurtured, and thrives. Ignoring macroeconomic trends or forces while making critical business decisions invites careless risks and increases the probability of business failure.
So, what is macroeconomics? What are the minimum trends that you, as a business leader, should pay attention to in order to increase the probability of success for your enterprise? As a refresher and for level setting, a simple definition of the economy is that it is a study of ways to make decisions that find proper balances between unlimited wants or needs and limited resources (i.e., goods, money, time, etc.). Macroeconomics is a branch of the economy that studies how the aggregate of economies works. It concerns the big picture of the entire economy.
In antiquity, the people of ancient Egypt (also known as Kemit) observed the cyclicality of nature across many disciplines. Macroeconomics is one such discipline that is inherently cyclical. For instance, there are periods of peace and prosperity contrasted with periods of war, depression, or even revolutions in economically weak countries. These periods are respectively referred to as booms and busts. Every country experiences these cycles driven primarily to two few factors; first monetary policy which includes interest rate and money supply managements, and second, fiscal policy that includes taxation and spending. These policies are correlated to countries’ management of debts and credits.
Given the interdependent nature of the world economy in the 21st century, as a business leader, these cycles, and the policies that regulate them, affect you directly. Needless to say, your understanding and careful study of these cycles, especially when they transition from one phase to another, could tremendously increase your probability of success.
What exactly is credit, and what is debt? Hedge Fund investor Ray Dalio provides an elegant definition in his book “Principles for Dealing with a Changing World Order – Why Nations Succeed and Fail” and his free e-book on Economic Principle: “Credit is the giving of buying power. This buying power is granted in exchange for a promise to pay it back, which is the debt.” All serious economists would tell you that taking on debts is not the issue. Real problems arise when meaningful assets are not produced with the credits, and the failure to repay interest-sensitive debts in a timely manner. This is what creates problems in the economies of most countries. If the country you operate in is experiencing these problems, your business will be affected.
There are numerous ways for economic policymakers to address debt issues for a relatively stable economy. However, four solutions are most common: (1) austerity measures, which involve reducing spending by cutting social programs; (2) debt restructuring (or worse, defaults), which resemble a form of bankruptcy; (3) quantitative easing (QE), which essentially means that the central bank “prints money” or “creates money” out of thin air (not backed by gold) and injects it into the economy; and (4) the transfer of money, which involves redistributing money from the rich to the poor or vice versa. Each of these solutions has economic impacts for targeted objectives. For example, QE stimulates growth but is inflationary, while austerity measures and also debt restructuring/defaults reduce debts but are deflationary.
Business leaders need to get a good grasp of macroeconomic terms such as Gross Domestic Product (GDP), inflation, growth rates, and ratios such as GDP per capita and debt-to-income.
GDP is an economic term denoting the annual or quarterly monetary value of all final goods and services produced within a country. It holds significance because it serves as a key indicator of a country’s economic size and health. It sheds light on the economic output alongside consumption and government spending during a specific period. A higher GDP reflects a healthier economy. Economists utilize various GDP-related ratios to gauge a country’s economic well-being. Among these, GDP per capita (GDP divided by the total population) measures the standard of living in a country, while the GDP growth rate signifies the percentage change in GDP from one period to another, indicating economic expansion or contraction.
Interest rate represents the cost of borrowing money, expressed as a percentage of the principal amount borrowed. Short-term interest rates are primarily determined by central banks. In the USA, the Federal Reserve Bank (the Fed) establishes a “target interest rate,” also known as the “fed funds rate,” which serves as a benchmark for financial institutions like commercial banks to borrow money among themselves. Commercial banks then set long-term interest rates, impacting anyone who borrows money for various investments.
Depending on the central bank's objectives, such as combating inflation, deflation, achieving full employment, or fostering economic growth, the target interest rate significantly influences the entire economy. Therefore, it is a critical indicator that business leaders must pay close attention to.
Business leaders don’t need to be economists. However, they need to study and understand key economic terms, cycles and trends to get a better grip of external factors that affect their businesses. This important exercise would help entrepreneurs reduce risks of business failures and improve their success rate.
Until we meet again, keep paying attention to macroeconomic, the primal driver of capitalism.
Fal Diabaté
Managing Partner, Barra Advisory Group

185 Responses

  1. Hello! Do you know if they make any plugins to help
    with Search Engine Optimization? I’m trying to get
    my blog to rank for some targeted keywords but I’m not seeing very good gains.

    If you know of any please share. Many thanks! I saw similar text
    here: Wool product

  2. A fascinating discussion is definitely worth comment. I think that you should write more on this issue, it may not be a taboo subject but generally folks don’t discuss such issues. To the next! Best wishes.

  3. He played his first official match for Milan and managed to score his first aim, a free kick, to win the first leg of Milan’s Europa League qualification match in opposition to CS U Craiova on 27 July.

  4. Our original plan to build massive, outdoor areas – whole sections of recent York, Space 51, lovingly recreated in excruciating element gleaned from maps and satellite pictures and, most notably, my dream of allowing players to explore all the White Home – simply proved to be unfeasible.

  5. However, note that as of 2019 this station and all rapid environs are undergoing transformation; development zones and detours abound, but hopefully not at a tempo at which Google Maps can’t keep up with the adjustments.

  6. Oh my goodness! a wonderful post dude. Thank you Nonetheless We’re experiencing trouble with ur rss . Don’t know why Can not sign up for it. Will there be anybody acquiring identical rss issue? Anyone who knows kindly respond. Thnkx

  7. You have made some good points there. I looked on the web for more information about the issue and found most people will go along with your views on this website.

  8. Everything is very open with a precise clarification of the issues. It was really informative. Your website is very helpful. Many thanks for sharing.

  9. This is the proper blog for everyone who desires to be familiar with this topic. You realize a great deal its virtually tough to argue with you (not that I actually would want…HaHa). You definitely put a fresh spin for a topic thats been discussing for many years. Great stuff, just fantastic!

  10. I simply desired to thank you so much yet again. I’m not certain what I would’ve handled without the type of advice shared by you directly on this problem. This was an absolute difficult situation in my view, nevertheless being able to see this professional strategy you solved that forced me to cry with happiness. I will be happy for this support and thus believe you know what a powerful job you were carrying out educating the others all through your website. I’m certain you’ve never met all of us.

  11. Thanks therefore significantly for this! I havent been this particular thrilled with a weblog for any long time period! You’ve got it, what ever which indicates in blogging. Anyway, You’re definitely an individual which has some thing to express which individuals should listen to. Keep up the outstanding job. Maintain upon uplifting the people!

  12. This is a proper weblog if you really wants to be familiar with this topic. You recognize a great deal its practically not easy to argue on hand (not too When i would want…HaHa). You definitely put the latest spin with a topic thats been revealed for many years. Excellent stuff, just wonderful!

  13. angelina produced that checklist? that dress is awful. not just is it boring but it makes her appear like she”s trying to cover up the truth that she looks emaciated. her shoulders are so bony it looks like she left the hanger in it. she normally looks wonderful.

  14. Hi, I think your website could be having internet browser compatibility issues. Whenever I take a look at your site in Safari, it looks fine but when opening in I.E., it has some overlapping issues. I simply wanted to give you a quick heads up! Apart from that, excellent blog!

  15. Do you mind generally if I mention one or two of your current blogs as long as I deliver you acknowledgement coupled with sources returning to your web site? My blog site is within the corresponding topic as your own and my web site visitors would certainly make use of some of the help and advice that you provide on this site. Please make sure to inform me if it is okay for you. Cheers!

  16. Aw, it was a very good post. In concept I have to put in place writing similar to this additionally – taking time and actual effort to create a good article… but so what can I say… I procrastinate alot by no indicates often get something completed.

  17. hello there boys it’s actually I am, Simply put I have fallen for a second time. Document haven?¯t been in this incredible website for many years since I have shed items private data, at the present I recently uncovered them back! Can miss all of you all of you seem to be our friends I presume all of you. Nice post!

  18. I do believe all the ideas you have introduced to your post. They are very convincing and can definitely work. Still, the posts are very quick for starters. May just you please lengthen them a little from subsequent time? Thanks for the post.

  19. My husband and i ended up being so relieved when Louis could finish off his investigation using the precious recommendations he gained while using the web pages. It’s not at all simplistic just to continually be releasing guidance that many the others could have been trying to sell. We really take into account we’ve got the website owner to appreciate for this. Most of the explanations you have made, the easy web site navigation, the relationships you can assist to create – it is all excellent, and it’s really letting our son and the family imagine that the situation is entertaining, and that’s exceedingly indispensable. Thanks for all the pieces!

  20. when I imagine, it isn’t on daily basis that you’re ideal and it’s certainly not every single day that men and women notice ones exact model of the world… but this excellent posting was incredibly motivating… warm regards

  21. You lost me, buddy. I mean, I imagine I get what youre indicating. I recognize what you’re saying, but you just appear to have ignored that you’ll find some other individuals inside the world who look at this matter for what it truly is and may perhaps not agree with you. You may well be turning away many of folks who might have been fans of your web log.

  22. Substantially, the post is really the sweetest on this precious topic. I fit in with your conclusions and will eagerly look forward to your coming updates. Simply saying thanks will not simply be enough, for the awesome lucidity in your writing. I will at once grab your rss feed to stay abreast of any updates. Genuine work and much success in your business efforts!

  23. Almost all I can say is, I’m not sure what to express! Except certainly, for the great tips which have been shared within this blog. I’ll think of a million fun approaches to read the articles or blog posts on this site. I’m sure I will finally take a step employing your tips on those things I could not have been able to address alone. You are so innovative to let me be one of those to profit from your valuable information. Please know how much I enjoy the whole thing.

  24. I¡¦m now not positive where you are getting your info, but good topic. I needs to spend some time finding out much more or working out more. Thanks for fantastic information I was looking for this info for my mission.

  25. hello there and thank you to your info – I’ve certainly picked up something new from proper here. I did on the other hand experience a few technical issues using this site, as I experienced to reload the web site many occasions prior to I may get it to load correctly. I have been brooding about if your hosting is OK? Not that I’m complaining, however sluggish loading instances times will very frequently have an effect on your placement in google and could damage your high quality rating if advertising and ***********|advertising|advertising|advertising and *********** with Adwords. Well I’m including this RSS to my email and can look out for a lot extra of your respective exciting content. Make sure you replace this once more very soon..

  26. After I originally commented I seem to have clicked the -Notify me when new comments are added- checkbox and from now on each time a comment is added I recieve four emails with the exact same comment. Is there an easy method you can remove me from that service? Appreciate it.

  27. Oh my goodness! Incredible article dude! Thank you, However I am having issues with your RSS. I don’t know why I cannot subscribe to it. Is there anybody else having identical RSS problems? Anyone who knows the answer will you kindly respond? Thanks!!

  28. I’m very happy to find this web site. I want to to thank you for your time for this fantastic read!! I definitely really liked every bit of it and I have you saved to fav to see new stuff in your blog.

  29. I was excited to uncover this great site. I want to to thank you for ones time for this particularly fantastic read!! I definitely enjoyed every little bit of it and i also have you book-marked to see new information in your blog.

  30. I was excited to find this site. I need to to thank you for ones time due to this wonderful read!! I definitely enjoyed every bit of it and I have you book marked to look at new information on your web site.

  31. Can I simply just say what a relief to find an individual who genuinely knows what they are talking about on the net. You actually realize how to bring an issue to light and make it important. More and more people need to check this out and understand this side of the story. I was surprised that you are not more popular since you definitely have the gift.

  32. Hi! I could have sworn I’ve visited this site before but after going through some of the articles I realized it’s new to me. Anyhow, I’m definitely happy I found it and I’ll be book-marking it and checking back often.

  33. Do you have a spam issue on this site; I also am a blogger, and I was wanting to know your situation; many of us have developed some nice procedures and we are looking to exchange techniques with other folks, please shoot me an email if interested.

  34. After going over a few of the blog posts on your web page, I honestly like your way of writing a blog. I bookmarked it to my bookmark website list and will be checking back soon. Please visit my web site too and let me know what you think.

  35. I do not even know how I ended up here, but I thought this post was great. I don’t know who you are but certainly you’re going to a famous blogger if you aren’t already Cheers!… Heya i am for the first time here. I found this board and I find It really useful & it helped me out a lot. I hope to give something back and aid others like you aided me….

  36. Wow! This can be one particular of the most helpful blogs We’ve ever arrive across on this subject. Actually Excellent. I’m also a specialist in this topic therefore I can understand your effort.

  37. You can certainly see your enthusiasm in the work you write. The earth hopes for more passionate writers like you who aren’t worried to say how they believe. Always follow your heart.

  38. Good post. I learn something totally new and challenging on blogs I stumbleupon every day. It will always be helpful to read content from other authors and practice a little something from other websites.

  39. I truly love your blog.. Very nice colors & theme. Did you make this web site yourself? Please reply back as I’m planning to create my own website and would like to know where you got this from or exactly what the theme is named. Cheers!

  40. I’m excited to find this web site. I need to to thank you for ones time just for this fantastic read!! I definitely loved every part of it and I have you saved to fav to check out new stuff on your blog.

  41. Hi! I know this is kinda off topic however , I’d figured I’d ask. Would you be interested in trading links or maybe guest authoring a blog post or vice-versa? My blog addresses a lot of the same topics as yours and I believe we could greatly benefit from each other. If you’re interested feel free to shoot me an email. I look forward to hearing from you! Awesome blog by the way!

  42. An outstanding share! I have just forwarded this onto a coworker who has been doing a little homework on this. And he actually ordered me lunch simply because I discovered it for him… lol. So let me reword this…. Thank YOU for the meal!! But yeah, thanx for spending time to discuss this topic here on your website.

  43. I’ve been exploring for a little bit for any high quality articles or weblog posts on this sort of area . Exploring in Yahoo I at last stumbled upon this website. Studying this information So i am satisfied to convey that I’ve an incredibly good uncanny feeling I came upon exactly what I needed. I such a lot undoubtedly will make sure to don’t put out of your mind this web site and provides it a glance regularly.

  44. Right here is the perfect web site for everyone who really wants to find out about this topic. You know a whole lot its almost tough to argue with you (not that I actually would want to…HaHa). You certainly put a new spin on a subject which has been written about for many years. Excellent stuff, just excellent.

  45. Howdy! This post could not be written much better! Reading through this article reminds me of my previous roommate! He always kept preaching about this. I most certainly will send this post to him. Fairly certain he’ll have a good read. I appreciate you for sharing!

  46. Amazing content! This was truly informative for everyone aiming to launch a venture. I found a lot of practical tips that I’ll be able to implement in my own enterprise. Thank you for sharing such great insights. Can’t wait to checking out more articles from you! Keep it up! To explore further tips on startup strategies, check out this useful resource: here.

  47. I seriously love your website.. Excellent colors & theme. Did you build this amazing site yourself? Please reply back as I’m hoping to create my own blog and would like to learn where you got this from or exactly what the theme is called. Kudos!

  48. The next time I read a blog, Hopefully it doesn’t disappoint me just as much as this one. I mean, Yes, it was my choice to read, however I really believed you’d have something helpful to talk about. All I hear is a bunch of whining about something you could possibly fix if you weren’t too busy seeking attention.

  49. Hi, I do believe this is a great website. I stumbledupon it 😉 I’m going to return yet again since I bookmarked it. Money and freedom is the best way to change, may you be rich and continue to guide others.

  50. Greetings, I think your blog may be having browser compatibility issues. When I take a look at your blog in Safari, it looks fine however, when opening in I.E., it has some overlapping issues. I merely wanted to provide you with a quick heads up! Apart from that, wonderful blog.

  51. You are so cool! I do not suppose I’ve read anything like that before. So nice to find someone with some original thoughts on this topic. Seriously.. many thanks for starting this up. This website is something that is needed on the web, someone with a bit of originality.

  52. Starting a business can be overwhelming, but with the right tutorial, you can optimize your journey. This comprehensive guide provides insights on how to build a successful startup and overcome common mistakes. Check out this link for further details and to explore more about reaching your potential.

  53. Fascinating blog! Is your theme custom made
    or did you download it from somewhere? A design like yours with
    a few simple adjustements would really make my blog shine.

    Please let me know where you got your design. Many thanks

  54. Wow, superb weblog structure! How lengthy have you ever been running a blog for?
    you made blogging glance easy. The total look of your web
    site is magnificent, as neatly as the content material!

  55. Can I just say what a comfort to find somebody who truly knows what they’re discussing on the web. You definitely realize how to bring a problem to light and make it important. A lot more people need to read this and understand this side of the story. I can’t believe you’re not more popular because you most certainly have the gift.

  56. Hello, There’s no doubt that your web site could possibly be having internet browser compatibility problems. Whenever I look at your blog in Safari, it looks fine however when opening in IE, it has some overlapping issues. I just wanted to provide you with a quick heads up! Apart from that, great site!

  57. That is a really good tip especially to those new to the blogosphere. Short but very precise information… Appreciate your sharing this one. A must read article.

  58. Nice blog! Is your theme custom made or did you download it from somewhere?
    A design like yours with a few simple tweeks would really make my blog
    jump out. Please let me know where you got your theme.

    Appreciate it

  59. With havin so much content and articles do you
    ever run into any issues of plagorism or copyright violation? My site
    has a lot of completely unique content I’ve
    either authored myself or outsourced but it seems
    a lot of it is popping it up all over the
    internet without my permission. Do you know any ways to help reduce content from being stolen? I’d really appreciate it.

  60. You’ve made some decent points there. I checked on the web for more info about the issue and found most individuals will go along with your views on this site.

  61. Spot on with this write-up, I truly believe that this website needs much more attention. I’ll probably be returning to read more, thanks for the info.

  62. Hi there! This article couldn’t be written much better! Looking through this article reminds me of my previous roommate! He continually kept preaching about this. I will forward this article to him. Fairly certain he will have a great read. Many thanks for sharing!

  63. Superb blog! Do you have any suggestions for aspiring
    writers? I’m planning to start my own website soon but I’m a
    little lost on everything. Would you suggest starting with a free platform like WordPress or go for a paid option? There are so many
    options out there that I’m totally overwhelmed ..

    Any tips? Thanks!

  64. Hello there! I could have sworn I’ve been to your blog before but after browsing through some of the articles I realized it’s new to me. Anyways, I’m definitely happy I stumbled upon it and I’ll be bookmarking it and checking back often!

  65. Excellent goods from you, man. I have bear in mind your stuff prior to and
    you are simply extremely great. I really like what you have
    received right here, really like what you are saying and the way in which wherein you
    are saying it. You’re making it entertaining and you continue
    to take care of to stay it wise. I cant wait to read much more from you.
    That is really a terrific website.

  66. Everything is very open with a very clear explanation of the challenges. It was truly informative. Your site is extremely helpful. Thanks for sharing.

  67. Hey there would you mind sharing which blog platform
    you’re working with? I’m going to start my own blog in the near future but I’m having a difficult time selecting between BlogEngine/Wordpress/B2evolution and Drupal.

    The reason I ask is because your design and style seems different then most blogs and
    I’m looking for something completely unique.
    P.S Apologies for being off-topic but I had to ask!

  68. Howdy would you mind letting me know which webhost you’re utilizing?
    I’ve loaded your blog in 3 different browsers and I must say this blog loads a lot faster then most.
    Can you suggest a good web hosting provider at a fair price?
    Kudos, I appreciate it!

  69. Really wanted to talk about my experience with Adam Graham’s The Growth Mindset weekly update. If you’re not familiar, the entrepreneur behind JustFix is the brain behind his startup, and his email has grown into one of my most useful resources for staying ahead in technology, business, and entrepreneurship. I’ve been following it for a long time now, and it’s definitely one of the best guides I’ve found for personal growth. Check out the full discussion on Reddit here.

  70. After I originally left a comment I appear to have clicked on the -Notify me when new comments are added- checkbox and from now on whenever a comment is added I receive four emails with the same comment. There has to be a means you are able to remove me from that service? Thank you.

  71. With havin so much content and articles do you ever run into any issues of plagorism or copyright infringement?
    My blog has a lot of exclusive content I’ve either created myself or outsourced but it seems a lot of
    it is popping it up all over the internet without my permission. Do
    you know any techniques to help protect against content from being ripped off?
    I’d genuinely appreciate it.

  72. Having read this I thought it was rather informative. I appreciate you spending some time and effort to put this short article together. I once again find myself personally spending a lot of time both reading and posting comments. But so what, it was still worthwhile.

  73. Oh my goodness! Awesome article dude! Many thanks, However I am having problems with your RSS. I don’t understand why I cannot subscribe to it. Is there anyone else getting identical RSS issues? Anyone that knows the solution can you kindly respond? Thanks.

  74. After looking over a few of the blog articles on your web page, I really appreciate your way of blogging. I added it to my bookmark site list and will be checking back soon. Take a look at my web site too and let me know how you feel.

Leave a Reply

Your email address will not be published. Required fields are marked *

Work with Barra Advisory Group to accelerate Growth

Determine your next big bets
Enhance clarity in your decision making process
Develop your people
Play to win