CategoryGlobal Focus

Corruption- can it be avoided?


  In Principal-Agent problem, agent serves (or fails to serve) the interests of a principal. The action of agent on behalf of his principal requires some discretion. There are situations that include 3rd party players (persons or corporate identities) who gains/loses by the action of the agent. There are regulations, violation of which causes a possibility of a cost (as a penalty) being...

Political Economy- A Science


I am being amazed by the ingenuity of John Stuart Mill since I’ve been reading his works, i.e., ‘On Liberty’. Also mentioned before, John Mill, in his Principles of Political Economy, argued that economics was not the “dismal science” that its radical and literary critics had supposed. He has put quite an effort on explaining his view on the Definition and Method of Political Economy. At his...

Boserupian Evolution of Agriculture

credit: TheDialogue

Boserup argues that the main stimulus to development of agriculture and productivity is the population growth. Her argument was an opposing view against the Malthus and Ricardo, who developed the macroeconomic theory of the relationship between demographic and agricultural movement in Europe. Mathusian theory claimed that “a population can never increase beyond the food supplied necessary to...

Do Policymakers’ decisions lead to an efficient allocation?


Usually, voluntary exchange without any external intervention leads to an efficient allocation of goods and services under the ideal market conditions. This is justified by the fact that prices coordinate the activities of buyers and sellers and transmits necessary information about the strength of demand and supply. Nonetheless, this type of efficiency is not an ideal one, because there are...

John Mill’s On Liberty


Persons of genius, it is true, are, and are always likely to be, a small minority; but in order to have them, it is necessary to preserve the soil in which they grow. – J.S.Mill Ultimately, while striving to get through the each subsequent day, I’ve managed to finish the ‘On Liberty’ by John. S. Mill. If my memory does not fluctuate too much from reality, I saw this...

Prosperity for All by Roger Farmer (Book Review)


oger Farmer, the distinguished professor of UCLA, challenges the orthodox macroeconomics models, especially New Keynesian model, in his new book- Prosperity for All: How to Prevent Financial Crises. The human being in me is deeply disturbed by every crisis. The economist in me recognizes the invaluable opportunity that is provided by every crisis to disentangle one economic theory from another...

Does Politics Matter? For Markets, Sometimes.


The word ‘politics’ is derived from the word ‘poly’ meaning ‘many,’ and the word ‘ticks,’ meaning ‘blood-sucking parasites. The narrative of global markets is shifting away from its focus on central banks and monetary policy toward geopolitics and fiscal policy. The surprise outcomes of the UK referendum on membership in the European Union and the US presidential election suggest that the “old...

Behavioral Economics applied to Agriculture Economics


Behavioral economics is perhaps the most important new paradigm in economics in the new millenium. It is based on the idea that people don’t behave rationally, like economics suggests – that they are, in Thaler’s words, Humans (homo sapiens) rather than Econs (homo economicus). In the 1960s and 1970s, Nobel Laureate Herbert Simon and others developed behavioral economic theories assuming that...

Economic growth in the US: A tale of two countries


 By Thomas Piketty, Emmanuel Saez, Gabriel Zucman [intense_dropcap font_color=”primary”]T [/intense_dropcap]he rise of economic inequality is one of the most hotly debated issues today in the United States and indeed in the world. Yet economists and policymakers alike face important limitations when trying to measure and understand the rise of inequality. One major problem is the...