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Showing posts from May, 2020

Decision Making as Output and Bounded Rationality

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  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra
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Trump, Twitter and Rutherford Hayes

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The war between President Trump and Jack Dorsey of Twitter seems to be escalating. In response to Trump’s action on social media, Twitter now has hidden Trump’s tweet on Minneapolis violence claiming it encourages violence and goes against the norms of Twitter. The retribution from Trump is only to be expected. In a political universe of US, this seems to open a new chapter. While television channels and newspapers are known to create polarising views against candidates and routinely turn partisan, this is unusual given it is one of the earliest instances on the social media. In fact, social media by claiming itself to be a platform has distinguished itself from the print and broadcast media. This distinction has enabled social media firms escape liability from posting of third party content.   Media companies in the West as suggested above find it convenient to become partisan. They go at miles to influence elections using their power of information production, distribution and di
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Trump, Twitter and Intermediate Liability-

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In 2012, there were bills with identical objectives introduced in both houses of the US Congress. One was the Stop Piracy Bill (SOPA) while the other was Protection of Intellectual Property Bill (PIPA). Entertainment and publishing firms were demanding an end to piracy which seemed to be major headache in increasing revenues. The culprits were ostensibly the online platforms that had mushroomed all over. The platforms included YouTube, Facebook, Twitter among others. However, it was YouTube which seem to host maximum pirated videos. The proposals for these legislations was to hold these platforms accountable for hosting the pirated content.   Unsurprisingly there was a huge uproar by these platforms. The platforms claimed they were merely the repositories of user generated content and do not claim responsibility for the authenticity of the content. They claimed that given the traffic on their sites, it was all but impossible to monitor each and every content. Any content flagged as
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Early Memories of Politics- A Journey Back in Times

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A few days back there was this interesting tweet . Like many other tweets, this would fall in the categories of interactive tweets while evoking a sense of nostalgia. The composer of the tweet indicated the fall of Berlin Wall was her first political memory and invited the Twitterati to share their earliest political memories. Like similar interactive tweets, Twitter was full of tweets each pointing towards their earliest memories. Till date it had earned around 9000 retweets with comments with more than 18000 replies. This would not obviously include those who have replied to the retweets or commented on retweets or commented on replies while retweeting. To each one, obviously there is journey back in times when they were young just understanding politics. Certain early memories do have potential shaping of their political leanings and beliefs. On certain occasions, it might be a sort of baptism by fire so as to speak.   The blog posts have usually avoided personal references and
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Decoding the Yogendra Yadav Agenda

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Behind the soft spoken suave urbane face lies a charlatan named Yogendra Yadav. While many might be taken in by his appearance, expression and vocabulary, he perhaps is one of those divisive faces that seek to foster their left liberal anti Hindu anti-India agenda. The psephologist turned political cum farmer activist is again in the news for reasons to do with economics that can be vicious if allowed to implement. He along with other alleged left liberal public intellectuals made public a position paper of sorts on how India should deal with the socio-economic crisis caused by the shutdown imposed in the wake of the pandemic caused by the Chinese virus, COVID-19.   The signatories to the paper are the usual suspects, some of whom do not even stay in India. They are the limousine liberals among whom are Abhijit Sen, Jayati Ghosh, Ramchandra Guha (since dissented on some points), Deepak Nayar, Jean Dreze among many others. For ten years from 2004-14, they were part of the National A
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Nepali Cartographic Aggression and India Options

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As India battles the Wuhan flu, China has opened a new front in Ladakh and Sikkim. The troops from both the countries are engaged in a tense stand-off in Eastern Ladakh after clashes in Sikkim. Further there are reports of Chinese helicopters crossing Indian border in Himachal Pradesh. The stand-off between the two countries is the most serious since the Dolam stand-off nearly three years ago. Meanwhile, China has opened a new front, an indirect one. They have instigated Nepal to rake an old boundary issue. The Nepalese government currently ruled by the Communists are in more ways than one functioning as puppets of China. In what is the most serious stand-off since the blockade of 1989, the government of Nepal have redrawn their maps including parts of India as their territory.   This cartographic aggression perhaps has roots in Chinese instigations behind the scenes but the immediate provocation is linked to Manasarovar Yatra. The Yatra to the holy lake of Manasasarovar and Mt. Ka
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Theorizing Skill India

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The large scale decolonization post World War II brought to the forefront the issue of development and growth for these countries. Mostly agrarian in nature, little or no industrial base at least comparable to modern standards, they faced structural asymmetries in their growth trajectory relative to their counterparts in the Western World.   The income levels were at subsistence level. The income levels of the large number of population needed to be increased. Some seventy years later, the economists and policy makers still are grappling with the same issue. The Indian government still aims to double the farmer’s income in the next couple of years. The programme of Skill India still continues (current version is refined and reinvented version of similar schemes earlier) to train the population on new skills to increase their income. A question naturally arises why did many of the countries that secured freedom post World War II did not make it big. There were no dearth of theories or a
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China-US Tensions, Taiwan and War

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While the world is coming to some sort of a grip on the Wuhan flu, battle of words is heating up between the US and China. President Trump, given the election year, is unlikely to leave any stone unturned to bring China to accountability for the pandemic. Europe too is moving towards demanding accountability from China. They have found support from Japan, Australia, New Zealand, and Canada among others. India is still discreet on its stand. The WHO general assembly though curtailed is scheduled the coming week and the debate is expected to intensify. India, given its taking over the position in the Executive Board will be compelled to reveal its stand on China. However PM Modi in his address to G-20 had raised the issue of the reforms in WHO to ensure accountability and transparency. Statements from senior ministers and leaders of the ruling party indicate a perception of India’s belief in the unnatural origins of the virus. They might be a trial balloon but indicate a possible startin
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Thomas Friedman,Theories and Wuhan Pandemic

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Thomas Friedman talked about globalization as irreversible phenomenon in his book ‘Lexus and the Olive Tree’. To him, globalization went beyond economics and politics and encompassed many other dimensions. He believed that globalization would unify people and countries and bond them into a web of cooperation that would base itself both on competition and coopetition. This he believed would free the world of any military conflict. In his book ‘The World is Flat’ he expands on this discussion and suggests that globalization has defined the contours of the daily life not just for countries and people but even those opposed to globalization. The anti-globalization movements and even terrorist organizations like Al Qaeda trace their growth and sustenance to the globalization processes.   Freidman’s theories on globalization are elucidated through what he calls the two laws. In his book, Lexus and Olive Tree, he expounds the MacDonald’s theory. According to this theory, two countries hav
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State Led Reforms and the Switch from China: Some Thoughts

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The past few days have seen reports from states like Madhya Pradesh, Uttar Pradesh, Gujarat among others about the announcement of new reforms in labour laws and land laws. Similarly some states have moved into reforming agricultural laws. Karnataka, Haryana, Orissa are among few other states that are following suit. It is expected that some more reforms might be announced in the next few days and weeks. A similar push from the Centre cannot be ruled out. Though most of these reforms were long overdue, apparently, the economic crisis induced by the Wuhan pandemic driven shutdown and the possibility of firms relocating production from China seem to drive these reforms.   Every crisis generates an opportunity. There is a silver lining in the darkest of the clouds. As the pandemic originating from Wuhan continues to create havoc, it is time to think of the post pandemic world order. It is possible for a gated globalization to emerge or a sort of economic NATO. Yet the first signs are
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The Stock Analyst's Dilemma

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Robert Frank discusses an attention-grabbing question in his presentation of different assignments he posts to the students. As one peruses the reports of various stock recommendations by analysts, invariably they point out to a ‘Buy’ recommendation. Alternatively, sometimes they might recommend a ‘Hold’ position but rarely do they suggest a ‘Sell’ recommendation. He seeks to identify the reasons behind this behaviour. All stocks do not behave in the same manner since they are linked to their firm performance which is uneven. Hence the stock prices would move a different trajectory for each firm and thus to a stock investor or somebody holding the stock in his or her portfolio, the decision cannot be the same. A genuine analyst would go into the intricacies of the fundamentals and technical of the stock and base his or recommendations on these foundations. A uniform recommendation in most cases defies the natural order. It suggests a signal of some sort of manipulation.   To an ana
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The Dominance of the Dollar

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As the lockdown imposed to curb the spread of the Chinese flu sinks the global economy into a recession, perhaps unseen in recent times, the issue of dollar dominance and possible shortage once again is taking a centre stage. Dollar for long has dominated the international financial scene, post World War II in particular. Some experts believe, the financial crisis of 2008 highlighted the adverse consequences of dollar dominance. Yet they feel rather than a strategy to reduce the dollar dominance and its spread to rest of the world, the dominance has in fact been reinforced. The assets and liabilities denominated in dollars across the world continues to increase. This to some analysts puts pressure on the US Federal Reserve as it goes about its monetary policy.   The fears are nothing new or unusual. Post World War II, many countries feared the outbreak of World War III. The US was the only country that had escaped relatively unscathed in the War and thus dollar was the only currenc
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