Tuesday, September 25, 2007

Economic logic

This term we have a paper on Government, Business and Society. The professor who taught us this course, Mr. Mudit Kapoor presented us some of the most compelling economic arguments we have ever encountered. And this course is clearly is one of my favourites at ISB.

Some of the counter intuitive economic logic I came across in this course are:

1. Government subsidies incentivizes farmer suicides.
2. Private sector benefits maximum from regulation.
3. A bribe could actually help in better economic allocation
4. Markets can be used for creating cleaner environments
5. Being righteous may be good for the individual, but in some cases the society is worse off


Some other interesting stuff which came along our way...

CEOs:

1. Stock prices on an average have historically increased, when a CEO dies
2. There is some empirical evidence which suggests that CEOs are actually being compensated for luck and nothing else.

Rules of Economics:

1. Every economist has an equivalent opposite economist
2. And both are wrong

Useful advice - Never ask an economist for a solution:

Some economists in US were asked to study the impact of making seat belts compulsory, on accidents. They came out with their findings that making seat belts compulsory would actually increase the number of accidents, as people would start driving more recklessly. So, when these economists were asked to come out with a solution to counter this problem, their suggestion was

"Put a dagger on the steering wheel"

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