1. Mercado Financeiro (Introdução)

Summary

In this lecture, Professor Alex Nina introduces the concept of savings in the economy, emphasizing its role in financial markets. He explains savings as income not consumed, covering various forms such as Caixa savings and CDBs. The concept of time preference is also discussed, highlighting why individuals save money for future, uncertain consumption. Furthermore, Nina explains the connection between saving and investment, particularly in terms of increasing productivity. The video also delves into the relationship between surplus and deficit economic units, showing how the financial market helps balance these through lending and borrowing, with interest as a reward for savings.

Takeaways

• 😀 Savings refers to the portion of income that is not consumed on a daily basis. It includes all forms of saving, whether under the mattress, in a Caixa savings account, or invested in assets like shares.
• 😀 Time preference is the concept of exchanging present, certain consumption power for future, uncertain consumption power. People save money with the expectation that future money will have greater value or utility.
• 😀 Rational individuals save money because they expect future consumption to be more valuable or useful, whether for an investment, larger purchases, or better financial security.
• 😀 Investment occurs when savings are used to enhance productive capacity, such as buying a machine that increases work productivity. Not all savings are investments, but when the purpose is to increase productivity, it is considered an investment.
• 😀 Economic units can be surplus or deficit. Surplus units save more than they need and have excess financial resources, while deficit units desire to invest more than they can afford and need additional financial resources.
• 😀 Borrowers are those who have a demand for more financial resources than they possess, while savers have surplus financial resources and can provide funding.
• 😀 The financial market facilitates the exchange between surplus economic units (savers) and deficit economic units (borrowers), usually through loans or other financial mechanisms.
• 😀 Interest is the remuneration that savers receive for lending their money to borrowers. Borrowers repay more than they borrow due to the interest charged, compensating the saver for the time preference of money.
• 😀 The financial market encompasses a wide range of institutions and instruments, from simple barter systems to complex tools like the stock market, all designed to address the needs of savers and borrowers.
• 😀 The role of the financial market is to solve the problem of excess savings (surplus units) and insufficient resources (deficit units), providing a structured way to lend and borrow money.

Q & A

What does the term 'savings' refer to in the context of the economy?

Savings refers to the portion of income that is not consumed on a daily basis. It encompasses any money set aside, whether it's stored under the mattress or invested in financial products like Caixa savings or stocks.

Why is Caixa savings considered a poor investment?

Caixa savings is considered a bad form of investment because its profitability is low compared to other securities such as CDBs or Treasury Direct, which offer better returns.

What does 'time preference' mean in economic terms?

Time preference is the concept where individuals exchange present, certain consumption for future, uncertain consumption. It's the reason people save money today in the hope that it will be more useful in the future.

Why do rational individuals save money?

Rational individuals save money with the expectation that the future consumption power of their savings will be greater and more beneficial than the immediate consumption power they could have used today.

How does investment relate to saving in terms of productivity?

Saving can be seen as an investment if the saved money is used to enhance productivity. For example, using saved money to buy machinery that increases work productivity can be considered an investment.

What are surplus and deficit economic units?

Surplus economic units are savers who have more financial resources than they wish to invest, while deficit economic units are borrowers who want to invest more than they have saved. Surplus units provide resources to deficit units, typically through lending.

What is the role of the financial market?

The financial market is a system of institutions and instruments designed to facilitate the application and capture of financial resources, helping to resolve the surplus and deficit issues between economic units.

How does interest work in the context of lending and borrowing?

Interest is the compensation paid by the borrower to the lender for the use of the financial resources. The borrower repays the amount borrowed along with interest, which is meant to account for the time value of money.

What are some examples of financial instruments in the market?

Financial instruments range from simple ones like barter to more complex ones like stocks, bonds, or mutual funds. These instruments are used to facilitate the flow of financial resources between savers and borrowers.

How can a financial market solve the problems faced by surplus and deficit economic units?

The financial market helps by allowing surplus economic units to lend their excess resources to deficit economic units, often with the expectation of earning interest, thus resolving the mismatch between savings and investment needs.