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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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Celebrating India's Series Win in Australia

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  One more edition of Gavaskar-Border trophy is over. The Indians have won second time in a row a test series in Australia. Two years back in 2019, India had won a series in Australia for the first time, something that eluded since their first tour Down Under at the end of 1947. Australia so as to speak was a sort of final frontier for the Indian team. Now that they have won a series in Australia twice, it need not be a mental block. The current final frontier would be South Africa where India are yet to win a series though they have won tests over there. India has won a test series in West Indies, England, Pakistan, New Zealand, Sri Lanka and of course the minor countries like Zimbabwe and Bangladesh. India is yet to play a test in Afghanistan and Ireland, the two babies of Test cricket. As India came back to win the series, the natural point of discussion revolves around the relative greatness of each of those series victories. It might be moot to have a subjective perception often b
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Judicial Restraint : A Note

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  The judicial activism in India has attracted consternation in many quarters. The past posts too have discussed at certain length the dangers of judicial activism and the possible repercussions it might have on the balance between the three organs of the state viz. the legislature, the executive and the judiciary. As long as they functions within the confines of the boundaries, they would be ok. Yet when one encroaches the domain of the other irrespective of the circumstances, then the decay starts. To the legislature, it is the fixed term that acts as a check and balance. The executive functions as subordinate to the legislature and too survives as long as it has the majority in the lower house of the legislature. Given the five year term and the consequent election or re-election, the governments keep changing. Therefore, they are elected and accountable to the people. They are punished if they do not perform. If there is transgression, there would be severe retributions from the el
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the Great Indian Vaccine Drive

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  India has begun the vaccination drive against the Chinese virus induced COVID-19 pandemic. Given the population size of nearly 1.4 billion, it would perhaps be the largest vaccination drive ever undertaken. The fact that it has to be undertaken in a very short time say about less than a year, the ambitions would be sheer audacity given the logistics involved in such a mammoth effort. It is not just about production of vaccines, but going beyond into the quality control, the transport from the plants to the different storage centres further to be distributed to the states and the districts and then to the vaccination centres. To add, the supply must be continuous with little disruption. The conditions for transporting the vaccines would have to be adhered to. Furthermore, the preparations at the each of the centres in terms of administering the vaccine apart from training the vaccinators itself would be daunting. There is furthermore need to coordinate with the people in fixing their
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Nehru and Buffer State Thinking

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  Former President Pranab Mukherjee seems to have stirred a hornet’s nest when in his posthumous book “My Presidential Years” apparently has made a reference to Prime Minister Nehru rejecting an offer from Nepali king to merge his state with India. This apparently happened during the restoration of King Tribhuvan while ousting the Ranas. The story has been floating around for decades, of course with semi-authenticity but with Pranab Mukherjee referring to the same in his book has reinforced the authenticity of the offer. It is highly conceivable that Tribhuvan did make an offer and it would not be unusual for Nehru to have rejected the same. Nehru did allow Bhutan and Sikkim to remain independent. In fact, the people in Sikkim wanted to join India, but PM Nehru allowed the monarchy to continue. It was left to his daughter Indira Gandhi as PM to ensure Sikkim acceded to India. It is possible that she would have annexed Nepal and Bhutan too at some point of time had not other domestic fa
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Central Vista and Modern Indic Architecture

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  Sometime after January 15, the construction of the Central Vista is likely to begin. The aim is to hold the Parliament Session in the Central Vista in the 75 th year of our independence. It marks the departure of holding sessions in the current parliament building a product of the colonial times. There is no doubt, that the current building while dilapidated does represent many memorable in the journey to what India is today. In emotional terms, it is not very easy to replace the current parliament building with a new one. Indubitably, there exists a case for growth into modernity of the 21 st century, there exists definitely a strong case for making buildings and by extension the architecture adaptable to the current needs. Yet, there would be traditionalists who would yearn for those days of yore. In a country’s lifetime, there are moments when one moves from the past to the present without necessarily destroying the past but through a careful preservation of the past in building
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Self Interest, Collective Interest and Evolutionary Biology

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  Market economics is based on the foundations of Adam Smith theorising the ‘Invisible Hand’. To Smith, it was an individual’s pursuit of self-interest that lead unintentionally to collective interest and thus enhances social welfare. Of course, the term social welfare was an innovation that came decades later after Smith. Many economists have built their models and theories based on the Invisible Hand paradigm. There are no doubt many examples of the same. For instance a cab driver comes to pick up after travelling for 3-4 kilometres not because of his benevolence but because of his self-interest, his interest in earning daily bread, his interest in stepping to higher levels of income. A hotelier would keep the restaurant open even in times of pandemic not because he or she cares for the hunger of the people but for their own interest in earning and sustaining their daily bread. E-commerce delivery agents functioned in the pandemic partly because of their self-interest rather than an
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Consumption-Investment Dynamics and the Budget

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  The Union Budget for the financial year 2021-22 is to be presented to Parliament in less than a month from now. The focus would be on the stimulus the government would give to different sectors as they seek to recover from the lockdown induced by the Chinese pandemic. The focus of the government in 2020 would have to be ensure the firms and households remain solvent during the pandemic lockdown but as the vaccinations are underway, there would be direction necessitated for revival of the economy. The economy must shed the past and look towards the future. An important indicator would be however the boost to the consumption. The economic revival in India has to pick either through a growth in consumption or growth in investment. The government expenditure has ensured the economy remains stable in turbulent times and has saved further blushes for the economy. it is time to revive the other components of aggregate demand.   Investment is sought to be increased through Atmanirbhar pr
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