HDSC Economic

Model C

Prime Claim Managing economy is a specialized business which can be learnt from HDSC Model; Heart, Diamond, Spade and Club.

HDSC Economic Model

• Heart stands for Married Couples

• Diamond stands for The Rich

• Spade stands for Labor Force

• Club stands for Government

Corollaries

• More Diamonds (The Rich), Higher GDP level

• Less Diamonds (The Rich), Flight of Capital

• More Hearts (Married Couple), Greater Aggregate Demand

• Less Hearts (Married Couple), Economic Recession

• More Spades (Skilled Labor), More Personal Income

• Less Spades (Skilled Labor), Less Taxes

Evidence-I

In every economy, there are four basic abovementioned groups. Government levies taxes on the rich and well-off to pay for the poor and labor force. It costs Government to maintain institutions of Central Bank and Treasury. In Pakistan, Central Bank is called State Bank whereas Treasury is called Federal Board of Revenue.

Evidence-II

HDSC Model is in vogue in the world especially in United States, China, France and Japan. Every group is free to change its status. A laborer can become a rich person. Developing countries must adopt this model to apply monetary and fiscal policies.

Evidence-III In a casino, every group comes and wins. If one group wins at the cost of others, it is unfair business.

Key Benefits • HDSC Model is a pre-requisite for

applications of modern economic initiatives and techniques.

• HDSC Model gives importance to resources especially human capital.

• This model simplifies macro-economic framework for students of economics.

Discussion Q: Is HDSC Economic Model universal in

application?A: Yes.Q: Does HDSC Model mention

international trade?A: It clearly mentions flight of capital from

one country to another. Q: Can anyone comment on the HDSC

Model?A: Suggestions are welcome, however,

Muhammad Ilyas, former LUMS Lecturer is welcome to critically appreciate the model.

Sajid Imtiaz: Expert Member CDKN, Member Advertising Age, Member Harvard Business Review