Pick your leader, Protect your system

Pick your leader, Protect your system

Economists often assume government as a third-party agent, and is responsible for maintaining an efficient market under fair regulation. This neglects the fact that politicians are indeed not interested in achieving the possible best market outcome, but desperately trying to find ways to secure office. Selectorate theory is an attempt to explain these political behaviours and consequences with…

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Asia’s problems and the West’s opportunities

Asia’s problems and the West’s opportunities

Displays of upheaval and state breakdown in global politics are not particularly rare, but the number of missed opportunities for dealing with these issues has been shamefully high in recent months. It’s easy to say that no one is to blame; after all there was Syria to deal with. And then Ukraine, Gaza, and now it seems like Iraq will indeed be making a violent entry in the list of failed states…

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Licensing and Rent Dissipation

Licensing and Rent Dissipation

Referring to my last article (Gondola Licence and transaction costs), I have discussed the relationship between licensing, information cost and price discrimination. My friend kindly pointed out that I have missed out one important constraint – Rent dissipation. In this article, I shall explain how licensing can restrict the dissipation of rent.

Rent Dissipation occurs when a valuable public good

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Ebola in West Africa: A Growing Economic and Humanitarian Crisis

Ebola in West Africa: A Growing Economic and Humanitarian Crisis

The Ebola outbreak in West Africa continues to worsen. Already prevalent in Guinea, Liberia and Sierra Leone, there are now fears that it is spreading to Africa’s largest economy – Nigeria. According to the World Health Organisation, as of July 20th there have been an estimated 1,093 cases (786 confirmed and 307 unconfirmed) and as many as 660 deaths (442 confirmed and 218 unconfirmed). As the…

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India’s budget and FDI: the vehicle on the road to investment-led growth

India’s budget and FDI: the vehicle on the road to investment-led growth

The Indian Finance Minister, Arun Jaitley, recently revealed India’s new budget. It is intended to be the Government’s strategy to build a stronger economy and secure Indian’s future. Modi, the new Prime Minister, is confident that India is destined to become a global superpower, but admits that a clear strategy is of paramount importance to structured growth. Jaitley has vowed to make sure that…

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Purchasing Power Parity (PPP) Explained

Purchasing Power Parity (PPP) Explained

[wpspoiler name=”Quick Definition” ]Purchasing power parity is when the exchange rate is adjusted to allow for accurate comparisons of purchasing power.[/wpspoiler]

What is purchasing power parity?

Purchasing power parity (PPP) is a theory developed by Gustav Cassel, a Swedish economist, in 1918. It states that the exchange rate between two countries is in equilibrium when their purchasing…

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Same people, new borders?

Same people, new borders?

There is perhaps no greater testament to the tenacity with which states will hold onto their national identity and borders than the relatively unchanged map of the Middle East since the Second World War. The half a century long border inertia that has gripped the region may soon come to an end however, as Iraqi Kurdistan will soon push a referendum through to legitimise their long-held desire for…

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John Forbes Nash, Jr. (1928 - )

John Forbes Nash, Jr. (1928 – )

John Forbes Nash Jr. is an American mathematician and co-recipient of the 1994 Nobel Prize in Economics for his work on game theory. He is also the subject of the 2001 film ‘A Beautiful Mind’.

Life

John Nash Jr. was born in Bluefield, West Virginia in 1928 to John Forbes Nash (Senior) – after whom he was named – and Margaret Virginia Martin. John Nash Senior served in the army during WW1, then…

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Third Degree Price Discrimination Explained

Third Degree Price Discrimination Explained

[wpspoiler name=”Quick Definition” ]Third-degree price discrimination is when a firm charges different market segments different prices for the same good.[/wpspoiler]

What is third-degree price discrimination?

Third-degree price discrimination is a pricing strategy which involves a firm charging different market segments different prices for the same good. 

For example, Museum XYZ charges adults…

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