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Showing posts with the label global warming

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

Weather changes and food production

Agriculture is often characterized by high variability of production outcomes or, production risk . Unlike most other entrepreneurs, farmers are not able to predict with certainty the amount of output that the production process will yield due to external factors such as weather, pests, and diseases. While one cannot deny the rapid advances in technology in food production through better seeds, yield management, irrigation systems etc, weather and climate yet remain wild cards. The drought in South Asia in 1987 and consequent wheat imports and havoc in livelihoods still remains fresh after 25 years.   The origin of Arab spring in late 2010in Tunisia started with the failure to quell food prices and the rise of water wildcatting in Yemen flared up protests there.  Some scientists believe that weather changes due to global warming can depress the food production beyond the current estimates.   UN estimates in 2011 revealed that food prices rose consecutively for eight months