Posts

Showing posts with the label economic growth

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
Post a Comment
Read more

A Dutch DIsease for Kerala

-
  As the Pinrayi Vijayan government took office for the second time in Kerala, they made an interesting announcement. The government announced a programme to launched from August 15, to remove extreme poverty from the state. This apparently could have been an innocuous statement but given the reputation of Kerala and the public relations associated with the same, it did set off some debate and perhaps more memes among the social media circles. There were people who were wondering what would that mean and perhaps it meant exporting Kerala labour to more regions both within and outside India.   Kerala has boasted itself of being the most literate state in the country. It is supposed to be the role model for development across the world. Amartya Sen has often highlighted how Kerala shows the path in terms of human development. To economists like Sen, it is the Human Development Index that would indicate the level of economic and social progress rather than the Gross Domestic Product o
Post a Comment
Read more

A Note on Economic Growth

-
  When one talks about progress, they usually refer to economic growth. Therefore it would be interesting to decode the dynamics of economic growth. It is quite usual to find in the media reports on how India or for that matter any other country is growing at a certain rate. There is usually talk of how a certain country is experiencing high growth rates. There are reports of how certain countries are experiencing sluggish growth rates. There are reports on how some countries are actually experiencing a negative growth. The latter is of course being pretty common news as the world grapples with the impact of the Chinese virus. In this context, it would be prudent to begin the discussion with the concept of growth.   Economic growth refers usually to the growth in the Gross Domestic Product (GDP) of a country on a year over year basis. In simple terms, the GDP of a country can be defined as the aggregate market value of all final goods and services produced in an economy in a given
Post a Comment
Read more

Technology - Prosperity Linkages : Cause or Effect

-
  Technophiles often equate technological adoption with increased prosperity. There is a sense of technological determinism detected by them. To these economic agents, technology provides a deterministic solutions to the global problems and thus enables the rise in prosperity. One might wonder a certain merit being detected in their argument. Prima facie, their arguments do sound impressive. For instance, the invention of the automobile has revolutionized transport and accompanying it were the network effects that enhanced growth. The increased growth certainly translated into a substantial degree of prosperity. There might be an argument on the degree of diffusion of prosperity or the relative shares in income by different socio-economic groups but what is undeniable is a reduction in poverty is something visible.   There are of course many others who argue that the technology has accentuated inequality across the global society. They tend to argue that technology does not further
Post a Comment
Read more