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Economic Metablog Roundtable

Several readers had asked for a list of economic blogs (which I discussed back on October 8)

Since that post, I've discovered a new resource: The Economics Roundtable. Its a metablog of economic and market related publications, hosted by economics professor William R. Parke of the University of North Carolina, Chapel Hill.

Warning: Highly addictive (Some posts may cause drowsiness).

Friday, November 26, 2004 | 05:47 AM | Permalink | Comments (2) | TrackBack (0)
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Comments

I don't understand the 8-october link

Posted by: Frans Groenendijk | Nov 27, 2004 8:08:28 PM

Let's say you opened a McDonald's in 1975. Starting in 1975, your revenue grew at ever increasing rates of growth (25% - 45% - 200%, etc). After about 20 years, the universe of people that have a relationship with your restaurant (including random visits) have largely established a pattern of consumption behavior with your restaurant in terms of number of visits as well as volume of consumption during those visits. It is at this point that the rate of your revenue growth begins to decline - though still growing in actual terms. However, once this rate of growth downtrend begins, there is virtually nothing that you can do to stop it because a long-established consumption pattern now exists. You cannot reverse the trend simply by adding items to the menu because not everything you add to your menu results in an accretive contribution to your top line. e.g. if I usually order a Big Mac and now have switched my consumption habit to a salad, this usually does not result in much of a net gain, if any. So your rate of growth continues to slide until it reaches a 0% rate of growth and ultimately turns negative never to trend up again. This simple example demonstrates the reality of the product or business life cycle and in particular what I call the Law of Innovation Saturation. Why do we in the United States believe that we can successfully battle something that is as certain as gravity itself? Growth is not limitless. Just ask the folks at General Motors, or Kraft Foods, or Blockbuster. It's perfectly OK that products and companies mature and ultimately decline. In fact, our ingenuity and energy helped to hasten that maturity by pushing the edges of all available envelopes. What isn't perfectly fine is the fact that we often deny reality and waste time defending the indefensible. How about some honesty instead?

Posted by: Tom Osenton | Apr 27, 2005 4:51:46 PM