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Showing posts with the label economy vs health

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

Peak End Experience of Wuhan VIrus Lockdown

Thanks to the virus originating from Wuhan, China and the destruction it has spawned as it traverses across the world, seemingly the whole world is shut down. The economic activity is down to a standstill with experts talking about a long recession ahead globally. There are a few however who believe the world is headed towards a V shaped recovery- a sharp dip in growth rates followed by equally sharp recovery. As the economies shut down, a lot of discussion is happening over the duration of the lockdown. With no vaccine or cure in sight, options seem to be very limited with either a priority on health implying a long lockdown or a priority on economy which carries the burden of swifter spread of the infection. The debate between advocates of economy first and advocates of health first has been captured in this post . Aside of the debate is a serious question of the socio-eco-political consequences that arise of the decision in extending or exiting the lockdown. In India, politic