Second-order Effects

The world economy is a huge and complex organism with many, many moving parts. Predicting macro-economic trends – growth, interest rates or currency fluctuations – is a hazardous profession.

The Bloomberg article linked below is a good description of how a change in one corner of the world may affect something seemingly unrelated in a completely different sector and country. This is also sometimes referred to as a second-order effect. Every action has a consequence and every consequence will also have its own consequence.

How can Brazilians buying more electric cars affect sugar prices in India?

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