Posts

Showing posts with the label US financial markets

Decision Making as Output and Bounded Rationality

  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

US Tech IPOs in the Pandemic Times

  The year 2020 has been pretty bad for the economy across the world. The pandemic induced by the Chinese virus seemingly created havoc across countries. As countries raced to protect their citizens, the trade-off was a lock down quite severe in some of the countries. The economic activity had to halt to protect human lives and prevent the virus from spreading. While the drug companies raced to be the first to produce the vaccine, the policy makers seemed to have little option but to restrict life and freedom till such time the clouds become clear. Recession is being reported from across countries with many reporting a dip in the growth well excess of 20% signalling a possible depression. The fiscal and monetary policy both seemed to show limitations. The fiscal seemed the better of the two with government pushing in cash transfers and stimulus to households and industry alike. There is no doubt the spillovers impacted the market too. The financial markets too have taken a sort of beat