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Showing posts from 2021

Decision Making as Output and Bounded Rationality

- July 16, 2021

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

The Economics Origins of BCG Matrix

- July 15, 2021

Economics has diversity of applications across streams. The applications range from management to business studies to national economies to politics to societies to history among others. Economics by its very nature has direct applications in the field of business theory. Many business theories, concepts, models, principles or whatever they might be have their origin in the domain of economics. The past posts have discussed such examples from the field of management theory that can be traced to economic roots. One such application that would be discussed in the current post would be the Boston Consulting Group (BCG) Matrix. Sometime back, there was a discussion on the application of BCG matrix in the context of sports popularity and innovation. The current post however would seek to locate BCG matrix in the context of economic theories and models. As is well known to students of management, BCG matrix finds its application in product portfolio management. The products in the fi

Minister's English and the Indian Elite

- July 11, 2021

The reshuffle in the Modi cabinet has led to quite a few new ministers taking charge of new departments. A closely watched department in the current backdrop was the Ministry of Health hitherto headed by Dr. Harshvardhan who was dropped from the Cabinet. He was replaced by Mansukh Mandaviya who found himself promoted from the Minster of State rank to the Cabinet rank. The limousine liberals who are more than eager to find flaws dug up an old tweet of Mandaviya on Gandhi and used this to begin mocking the English of the Minister. It is possible that the Minister is not well versed in English with perhaps his studies being in Gujarati. The language of English might hardly matter in his work but the fact he cannot speak English is a reason good enough to be mocked at and be questioned about the fitness to be a minister. This brings to the fore the question whether the language becomes critical in terms of being a minister at the centre or the states. In more precise terms, it is t

Decoding the Cabinet Reshuffle

- July 08, 2021

It was hardly a routine cabinet reshuffle. The reshuffle coming almost in the middle of the term was essentially a reset of the government in the run up to the elections of 2024. It was equally about those were dropped as much as it was about those who were inducted or promoted. At one level, it is a step towards elimination of independent charges being handed to ministers of state. At the same time it was about the performance being the absolute parameter with reputations hardly counting anything. It would not save some senior figures while it would induct quite a number of relatively young parliamentarians perhaps giving them a chance to prove themselves. There were some losers and few gainers as usual but the unmistakable signs of PM’s footprint was visible throughout. There appeared to be strong homework with respect to the competencies and the castes. The ministry was not about competency alone but an integration of the same with the caste and regions. In other words every regio

Central Encroachment into Cooperatives

- July 07, 2021

The Modi government is set for a Cabinet reshuffle. In the midst of the reshuffle, there come the news of creation of new Ministry. The ministry is of the Department of Co-operation. The intended objectives seems to be facilitating the growth of cooperative societies across states and build by multi state cooperative societies. The cooperative movement while having roots across states is confined in terms of its structure to a single state and cannot go beyond the boundaries of the state or perhaps the district. Amul for instance would be confined to Anand district and not go beyond the same. The same thing would perhaps hold good for Karnataka Milk Federation. This is true of many cooperative societies across the country. The ability to leverage the scale and scope is constrained thanks the legislative framework in place. If there needs to be changed to allow the successful cooperatives to flourish, there needs to be changes in the legislative and governance framework. There m

People and the Third Wave of Chinese Virus

- July 06, 2021

The second wave of the Chinese virus induced pandemic seems to have abated in most parts of the country. Yet Kerala continues to defy the projections. Maharashtra too continues to report high number of cases. The scenario in North Eastern States too is not very encouraging though in absolute numbers seems less. The situation however has improved in northern and western states where the cases have dropped down dramatically. The states in the South apart from Kerala seem to be under control though the numbers are still high for comfort. In this backdrop, the states and union territories are opening up their economies and societies. While there are restrictions, the economy seems to be moving back to the days of pre-second wave. The business is likely to pick up in the weeks coming ahead. Yet while one seeks to recover from the second wave, the fear of a third wave seems to linger on. There is a feeling that this might impact children more and thus a need to prepare for them. Seco

Teaching Economics: Complement Rather Than Compartmentalize

- July 02, 2021

To students of economics, it might prove to very interesting subject. Yet to many others economics evokes a phobia, a phobia of those graphs and calculations and theories and assertions often contradicting and often supplementing and what not. Irrespective of the context, there is always the other hand which would forecast very differently. This is something a puzzle to the outsiders or what they might call an economist’s hedge but to economists it is about viewing things in different perspective and the manner in which the outcome would differ following the change in any of the variables. Teaching economics therefore is a challenge in the sense of convincing the students of the validity of the theories without evoking the boredom associated with the ingraining of the theoretical contours. Economics teaching at many a level especially down the elite grade is all about stereotyping. It is about regurgitation of the text books. Text books themselves would be a compendium of exist

Woke Protests and the Olympics

- June 30, 2021

Sports and politics are hardly divorced from each other. Each can be a means to achieve an intended objective. To Hitler and his Nazis, the 1936 Olympics was an instrument to tell the world their alleged superiority. There were open voices of racism through that Olympics. In 1972, Palestinian terrorists killed ten Israeli sportsmen after kidnapping them from the Olympic village. The treatment of Blacks in South Africa was not merely confined to sports but in fact sports played a major role in aggravating and later elimination of racism. The 1986 Commonwealth Games in Edinburgh were boycotted due to the British policy on South Africa as did the African countries in the 1976 Olympics due to New Zealand rugby tour to South Africa. The 1970 ban on South Africa in cricket was caused by their refusal to allow to Basil D’Olivera, a coloured cricketer in the England cricket team. In 1968 Olympics at Mexico, Tommie Smith and fellow medalist John Carlos raised a black gloved fist when the US n

Tourism Industry in the Times of Pandemic

- June 28, 2021

The pandemic induced by the Chinese virus has taken a toll on the economies across the world without exception. Industries are affected in terms of their productivity one due to lockdowns and thus restriction on production as also on demand and secondly due to the employees testing positive for the Chinese virus thus absenting themselves from work and perhaps affecting the co-workers in the process becoming superspreaders. The economies have witnessed recession across board and it is only now that some economies are turning the corner. It is however very early days to be optimistic of a full recovery in the current financial year. India was on the verge of a turnaround before the second wave hit in full fury resulting in lockdowns across states. Though the lockdowns varied in intensity and perhaps was not as strict as it was in the first lockdown, the impact on productivity would have to be gauged as the data comes in for the first quarter of the financial year 2021-22. Rather than p

Judicial Interventions in Hindu Cultural Matters : A Note

- June 27, 2021

In India, the judiciary in theory can be a dictator with very little options existing to question its choice. It can turn itself into an institution without accountability at the whiff of the hat. It per se exists in current boundaries only due to its own restraint and this is by its own admission at different points of time. With passage of and more so in recent years, the court has turned a law into itself exercising jurisdiction on things all and sundry. It seems to have an opinion on everything under the sun. Often it functions to the gallery rather than application of judicial principles on matters of law. It has taken refuge on the grounds that it fills the vacuum when the executives abandons its role. The fact of the matter however is often it seeks to encroach into executive powers on the grounds of inefficiency of executive in implementing what can be termed as pro-people decisions. In exercising power under the garb of protecting welfare of the people from the hands of alle

An Economics Approach to Thinking: A Note

- June 26, 2021

As mentioned many a time before in the past posts, economics is not something narrow in the sense that it is restricted to demand and supply. It is an erroneous assumption that economics is about matching demand and supply. There is no doubt economics over the last 125 years or so has moved to demand based analysis and this virtually meant the demand curve becoming critical to the analysis. Yet, it would be only part of the answer as the demand is correlated to the supply. Therefore, to many, in common sense it became easier to associate economics with demand and supply. As they say in branding, perception is more important than the truth. Therefore, in the context of economics too, the perception often overrides the truth. Economics is far more than demand and supply. It is about understanding of interactions of individuals in producing the aggregate outcomes. This was something was the nicely summarized by Thomas Schelling as micromotives leading macrobehavior. There is an economic

India's Hopes in Tokyo Olympics

- June 23, 2021

June 22 is marked as the Olympic day and 30 days remain for the start of the delayed Tokyo Olympics. It is for the first time, the Olympics are happening in a odd year and under much uncertainty. There has been opposition within Japan to hosting the Olympics given the circumstances. Japan has just lifted the state of Emergency imposed in the wake of the spike in the cases of Chinese virus. The torch relay has to face multiple barriers. A number of volunteers have withdrawn from the contest. There have been different rules framed for different athletes from different countries. There has been opposition in India over the ill-treatment being meted to Indian athletes in terms of severity in quarantine imposition and interaction with other athletes. It would be mammoth task for them to carry out the Olympics with more than 10000 athletes and perhaps the double the number of officials. There has been ban on foreign spectators which has invited a severe backlash more so because of non-refu