Global Recession – What is your prescription?

Although countries affected by the economic downturn are each in a different mode of correction and stability, we still hear opinions being expressed, by the experts and the concerned. Now it is Europe’s turn, with economies such as Greece, Spain and UK grappling with policy measures – bail-outs, public expenditure cuts and so on.

In this context, a little story occurred to me with a set of possible scenarios.

Jack and Jill have their birthdays coming close to each other’s. They are about to buy the gifts and, being practical, each wants to find out what gift the other would like to receive. Obviously, the respective budget allocation is discussed – Jack’s being $100 and Jill’s $50. What happens then?

Scenario 1

Considering the budget, Jack and Jill each find out what exact gift they would like to receive. Those exact gifts are bought and exchanged on their respective birthdays.

Scenario 2

Jill suggests that they drop this idea of exchanging gifts and that Jack let her have $50 in cash, saying that this arrangement makes sense to her. Jack agrees with her and Jill is richer by $50.

Scenario 3

Jack and Jill think of an idea. How about inviting their friends, say six of them, and plan a nice get-together in celebration of both birthdays? Of course, a date convenient to all can be fixed. With $150 at their disposal, not to mention the possibility of the invitees chipping in, they can buy the necessary ingredients for a nice meal, prepare the dishes themselves, again each contributing with their talent and expertise, and have a great time together. Jack and Jill like the idea and decide to go ahead with it. Friends are invited. The grocer and other vendors get some business. A nice party happens.

Which scenario would you rather favour?