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Showing posts with the label electric vehicles

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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Oil Price Conundrum and India

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  The fuel prices in India seems to be heading northwards with little signs of reversal. They have touched historical highs in recent times. The cascading effect of fuel price rise on other goods would in all probability ensure inflation is headed northwards. As inflation would breach the 6% benchmark, the outcome would obviously be a tightening of the interest rates. This is something that India would want last thing to happen. As the demand picks up albeit with uncertainty of fresh spurt in COVID cases, there in all likelihood will see an increased demand for fuel. The prices are likely to go up given the cut in production across the Middle East. While India has sought to diversify its oil sources, the region continues to depend heavily on the Middle East. The Saudis and their oil counterpart countries do not seem to be in a mood to increase the production. To add, the crisis in Yemen, an offshoot of which has been constant attack on oil fields in Saudi Arabia and UAE by the Yemeni r
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Geopolitics of Electric Vehicles

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At the dawn of 2020, India seems to be on a trajectory to switch to electric vehicles for mobility. Unarguably, mobility both intra city and inter-city pose huge challenges for policy makers. For centuries, mobility was essentially a function of the speed of human legs and animals. Machine power touched mobility solutions only in the last two centuries or so. Horse drawn trams were all over New York even 120 years ago till the car took over. The IC engine transfigured the mobility across the world. Personal mobility as distinct from public travel got a new spur. Fascinatingly, the early cars were more electric than fuel based. Large scale discoveries of oil in the Gulf at the dawn of the 20 th century in addition to the reserves in the US led to an era of cheap fuel. Private ownership of cars began to increase, US in particular. Increased competition supplemented by innovation and price drops enabled the virtuous cycle in automobile industry. Distinctive to car as theme
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