Why Should Executives and Managers Study Economics?

 

Noncynical View:

According to Kelsey Miller of Harvard Business School, there are five economics skills all managers need:

1) Understanding of Economic Concepts and Frameworks

2) Ability to assess demand

3) Ability to conduct and interpret economic analysis

4) Ability to communicate findings

5) Strategic thinking

 

Cynical View:

Aan executive/ manager needs to know economics to gain a skill of not being repeatedly fooled by defunct economists:

“The purpose of studying economics is not to acquire a set of ready- made answers to economic questions, but to learn how to avoid being deceived by economists.” - Joan Robinson

 

“Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back” - John Maynard Keynes

 

Naysayer or not, study Economics if you want to succeed in business!

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You might be noncynical or cynical when it comes to economics or economists. It does not matter! Especially if you are in an executive position, you should still know economics regardless because you have a business to improve and grow.

 

Economics for Executives and Managers is a results-oriented program that equips managers with the fundamental knowledge of economics, key concepts, guidelines and expert advice to help them effectively manage their business in order to survive and thrive in a radically changing world where uncertainty and competition have increased as never seen before in history. It also helps participants to apply their knowledge of economics to their decision-making processes on a day-to-day basis. Participants of this interactive workshop will also better understand the economic realities of their environment and their own role in achieving both organizational and personal success.

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(*) Program Leader:  Tayfun Gürler who has been living in the U.S. for 35 years conducts his consulting and training activities in the fields of economics and finance in our strategic partner, MicroMacro Consulting (VA, USA). He is a graduate of Istanbul Technical University, Industrial Engineering Dept., and he holds B.S. Economics from Istanbul University and MPhil Economics from George Washington University. Prior to his role as the president of MicroMacro Consulting, Gürler has held research, teaching, and consultancy positions at the American Enterprise Institute, the World Bank, Capital Insights, George Washington University, and Istanbul University.

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Program Structure and Topics Addressed:

 

Introduction: Why are we here? Why now?

 

The building blocks on which modern economic theory is built

 

Introduction: The building blocks on which modern economic theory is built

• Scarcity

• Tradeoffs

• Opportunity Cost

• Comparative Advantage

• Rationality

• Incentives

 

Microeconomics- Part I: The Context in Which Firms Operate

 

• Demand

  • The Law of Demand 

  • Market Demand v. Individual Demand

  • Shifters of the Demand Curve

  • The Elasticity of Demand

  • Consumer Surplus

 

• Supply

  • The Law of Supply

  • Market Supply v. Individual Supply

  • Shifters of the Supply Curve

  • Elasticity of Supply

  • Producer Surplus

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• Market Equilibrium

  • Putting the Supply and the Demand on the Same Graph and See What Happens

  • Factors that Change the Market Equilibrium

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• Taxes

  • Direct Taxes

  • Indirect Taxes

  • Elasticity and Tax Burden 

 

• Regulating Externalities

  • Positive Externalities

  • Negative Externalities

  • Dealing with Externalities

 

Microeconomics Quiz-1

 

Microeconomics - Part II: Production Decisions and Pricing

 

• Cost Minimization

  • Measuring Cost

    • Economic Cost v. Accounting Cost

    • Opportunity Cost

    • Sunk Cost

    • Fixed Cost v. Variable Cost

    • Fixed v. Sunk Cost

    • Marginal and Average Cost

  • Cost in the Short-run

  • Cost in the Long-run

  • Cost Minimization

 

• Operating in a Price-Taking Industry, i.e., a Perfectly Competitive Industry

  • Equilibrium

  • Efficiency of the Perfectly Competitive Market

 

• Pricing with Market Power

  • Monopoly

  • Oligopoly

  • Monopolistic Competition

  • Price Discrimination

  • The Two-Part Tariff

  • Bundling

 

• Double-Marginalization and Supply Chains

  • Supply Chains

  • Vertical Integration

  • Horizontal Integration

 

Microeconomics Quiz-2

 

Microeconomics - Part III: Game Theory (A Framework for Strategic Interactions)

 

Robert Aumann’s take on describing Game Theory

 

Simultaneous-Move Games

• Dominant Strategies

• The Nash Equilibrium

 

Sequential-Move Games

• The Extensive Form of a Game

• Advantage of Moving First

 

Repeated Games

• Empty Threats

• Commitment and Credibility

 

Microeconomics Quiz-3

 

Strategic Analysis: How Turkish Companies Can Become Global Successes

 

Macroeconomics – Part I: Concepts, Definitions, and Issues

 

Emerging Issues

• Increasing inflation

• Worsening income inequality

 

Gross Domestic Product (GDP): Measuring Total Production and Income

• Measuring GDP

• Constituents of GDP

• Real versus Nominal GDP

• GDP and Welfare

 

Economic Growth, Sources and Policies

• Productivity

• Public Policy

 

Labor Dynamics, Unemployment and Inequality

• Measuring Unemployment

• Searching for Jobs

• Minimum-Wage Laws

• Collective Bargaining

• Efficiency Wages Theory

• Measuring Inequality

 

Macroeconomics Quiz-1

 

Macroeconomics – Part II: Theories in Macroeconomics

 

Theories of Inflation, Monetary Matters and Economic Fluctuations

• Measuring inflation – the Consumer Price Index

• Classical View of Inflation

• Keynesian View of Inflation

• The Cost of Inflation

 

The Aggregate Expenditure and Output

• Keynesian Cross Analysis – Prices Do Not Always Adjusts!

  • Planned Expenditures

  • Autonomous Expenditures

 

Aggregate Demand (AD) and Aggregate Supply (AS) Analyses

• Facts about Business Cycles

• The Aggregate Demand Curve

• The Aggregate Supply Curve

  • Short-Run Aggregate Supply Curve (SRAS)

  • Long-Run Aggregate Supply Curve (LRAS)

• Bringing All Curves together to Explain

  • Recessions

  • Expansions

 

Macroeconomics Quiz-2

 

Macroeconomics – Part III: Policy Implications and Connections to the Financial System

 

Monetary and Fiscal Policy

• Monetary Policy Tools

• Monetary Policy’s Effect on Aggregate Demand

• Fiscal Policy Tools

• Fiscal Policy’s Effect on Aggregate Demand

• Using Monetary and Fiscal Policies to Stabilize the Economy

 

The Domestic/International Financial System

• Financial Institutions

• Saving and Investment

• The Market for Loanable Funds

• The Prices for International Transactions

  • Nominal Exchange Rates v. Real Exchange Rates

• Exchange Rate Determination

  • Purchasing Power Parity

  • Interest Rate Parity

 

The Financial Crisis and Other Challenges

• Agency Theory and the Definition of Financial Crisis

  • Asymmetric Information 

    • Moral Hazard

    • Adverse Selection

• Dynamics of Financial Crises in Advanced Economies

• Dynamics of Financial Crises in Emerging Markets

• Contagiousness of Financial Crisis

 

Strategic Analysis: The Economic Outlook of Türkiye

 

Wrap up and close

 

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