2021-2022 17TH EDITION ECONOX 21 DELHI PUBLIC SCHOOL, RK PURAM
2021-2022 17TH EDITION ECONOX 21 DELHI PUBLIC SCHOOL, RK PURAM
TTHHEE SSCCIIEENNCCEE OOFF NNEEUURROOSSCCIIEENNCCEE!! - SAANVI PANDEY 10G We are constantly making financial decisions ranging from small and mundane to life changing. These everyday decisions multiplied by billions of people form the basis of the worldwide economy. Neuroecomics is the study of how organisms make value-based decisions and how these decisions are expressed neurally. The main goal of neuroeconomics is to understand the brain mechanisms that are responsible for making these evaluative processes. Paul W. Glimcher is an American neuroeconomist, neuroscientist, psychologist, economist, scholar, and entrepreneur. He is known for his central role in founding and developing the field of neuroeconomics which takes an interdisciplinary approach to understanding how humans make decisions. Scott Huettel, a professor of psychology and neuroscience at Duke University says Neuroeconomics studies those situations where choices are clear-cut or rational, and involve unacknowledged factors and risk - something economics has had a hard time explaining.
So then the question arises, how does the brain actually work in decision-making ? To learn more about these decisions scientists measure brain activity as people complete economic tasks. For example, Running brain scans as people play a simple double-or-nothing game. When a player decides to risk it all to double their winnings, activity increases in a part of the brain called the insular cortex. Scientists hypothesize that the networks of the insular cortex interact with other brain areas, including parts of the limbic system that functions in learning, memory and emotion, to help the player picture the negative and positive aspects of taking such a risk. ” On days when male traders Some firms are now using had higher testosterone levels brain imaging technologies than average, they like MRI(Functional magnetic took larger risks. Isn’t it resonance imaging) and EEG( fascinating? With millions of Electroencephalogram) to dollars on the line, hormones measure how the brains of could be making the difference prospective buyers respond between a good day at the to advertisements in real- market and a very bad one. time. For advertisers, it’s advantageous to use measurable brain reactions to craft effective messaging - a discipline known as “neuromarketing\".
When Economics meets L Psychology Rational agents”, “utility maximization”, “profit-seeking behavior” - these are terms that all of us, as students of economics, probably hear on a daily basis. Classical economics is premised upon the basic assumption that all agents in an economy are perfectly rational, i.e. their primary motive is to maximize their utility (the total satisfaction dIerived from the consumption of a commodity) and expand their profits. The individual, in classical economic terms, has “perfect” information about the market and acts independently to make a choice that is most rewarding for him/her. That might seem as easy as ABC. But, here’s a secret: it’s not. Realistically speaking, individuals - like you and myself - are not always perfectly rational. We may, sometimes, act intuitively and impulsively instead of planning our steps using reason and logic. Humans are likely to be short- sighted, selfish, and unreasonable while making decisions.
This forms the foundation of a rather recent field of mainstream economics, that takes a more realistic view of human decision-making by studying the various biases and L tendencies that influence people’s cognition, known as behavioral economics. Contrary to classical economics, behavioral economics deals with the deviations from the model of homo economicus or the rational man and “explains human behavior through the lens of social preferences, heuristics, and norms”. The assumptions and findings of behavioral economics do not, in any way, negate those of classical economics but only add a layer of complexity to them. The central concept of behavioral economics is bounded rationality. This term, coined by Nobel Memorial Prize recipient Herbert Spencer who proposed the idea that humans have limited information-processing capabilities, is simply a reiteration of the idea that humans are not rational and there may be certain biases at play when they make decisions. Traditional economics makes three key unrealistic assumptions about human behavior: they have unbounded rationality, unbounded willpower, and unbounded selfishness. However, behavioral economics debunks all three of them.
The findings from a study conducted by Colin Camerer and other researchers on taxi drivers in New L York City, in the mid-1990s, provides an accurate example of suboptimal/irrational behavior in economic decision making . These drivers paid a fixed amount to rent their cabs for twelve hours and kept all revenue to themselves. The ideal (profit-maximizing) strategy would be to work overtime on ‘good’ days (rainy days or days with a festival in town) and quit early on ‘bad’ days. However, the researchers assumed that if they set earning targets for each day and considered any shortfalls relative to that target as a loss, they would likely quit early on good days and work longer on bad days. Unsurprisingly, that is exactly what happened. Willpower relates to self-control which is our ability to delay gratification and resist impulses to avail immediate rewards. We surely do not have unbounded willpower, as we often find ourselves in a situation where we have spent, eaten, drunk, smoked, or exercised too much. It is a natural human tendency to lack self-control.
Lastly, people are not selfish as classical economic theory assumes. Even though we may sometimes act to serve our own interests, we do tend to act selflessly. Each one of us is concerned, to differing degrees, about the well-being of others. According to the India Giving report 2019, released by Charities Aid Foundation, nearly three-quarters of India’s adult population donated money to a good cause (donating to a charity, religious organization, or sponsoring someone).
PONZI SCHEME'S -LEGAL OR ILLEGAL Ponzi schemes are devious and can remain hidden from the general public. This strategy is used to illegally extract money from the people and was first performed by a man named Charles Ponzi. The definition of a Ponzi scheme is: It is a type of pyramid scheme in which the operator, at the pyramid’s top, acquires a small group of investors that is initially provided with tremendous investment returns via funds secured from the second group of investors. In simple words, it means to take money from one party and distribute it as profits to the other. This illegal act can continue until money keeps on coming from new investors and goes to the existing investors .One such Ponzi scheme was made by Mr. Bernie Madoff. It is the largest Ponzi scheme to ever get exposed. The amount of the fraud was a whopping $64.8 billion. Madoff was a very renowned person on wall street and the whole world. He was once the chairman of NASDAQ (It is a stock exchange in New York city which trades giant tech companies like Amazon, Apple, etc.)
In 1960 Madoff founded a penny stock brokerage firm which eventually grew into Bernard L. Madoff Investment securities. His firm was one of the greatest and managed about $ 65 billion at its peak. The scam was uncovered on December 10, 2008, when his two sons Mark and Andrew Madoff told the authorities that their father had confessed to them that he was running a Ponzi scheme under the hood of his AMC (Asset management company). The following day the FBI (Federal Bureau of Investigation) and SEC (Securities Exchange Commission) started investigating the case and later found Bernie Madoff guilty of securities fraud and sentenced him to jail for 150 years. He intelligently planned the whole scam and ran it for over 20 years. His bad days arrived in 2008 due to the global recession caused by the crash of the housing market in the USA. The house of cards made by Madoff started falling down when the investors started asking for money after the recession. The amount asked for by the investors was about $ 7 billion. Madoff said that he did not have that kind of money and had only a couple of hundred million dollars left with him. Many famous people also invested in this scam and have lost a lot of money.
. The scam started because Madoff could not offer the returns he promised to his investors and started to transfer money from new investors to his own bank account and then give some part of it as returns to his old investors. In the end, Madoff was sent to jail for 150 years and the state government paid out more than $ 700 million to the defrauded investors; but the fact remains that billions were lost and those billions have still not been recovered. AJITANSH KAR 9G
EOCFOANHOOMUI CSEVWALIFUEE All around the world, women spend excessive time on unpaid homework - ranging from a maximum of 400 minutes per day in Iraq to 200 minutes per day in Taiwan, according to the International Labour Organisation. On average, men spent 83 minutes in unpaid care and homework while women spent three times more at 265 minutes. But a very fundamental and a very basic question originates: So should housewives be paid wages for doing largely thankless household work? India's 160 million homemakers clean, tidy, cook, wash up and manage the family budget. They fetch food, water, and firewood, and give care to children and their in-laws without complaining a mite. Therefore, the answer is a clear and obvious YES. One way to eliminate gender equality is to calculate The economic value of the work being done by a housewife.
This can be done by first of all by listing all the tasks being done and then calculating the value that one would have to pay if the same work done by her is given to somebody hired. For example, when she teaches her children she should be paid the same amount that is to be given to a tutor or a teacher with the same knowledge and has the same amount of patience when teaching her kids. Let's start a significant change. Doing the dishes, vacuum cleaning, washing the clothes, All day she is engaged in scrubbing the floors. She likes her house neat and tidy, works all day long even when she has no inclination, She makes her home well-ordered even if it is the messiest in the nation, There is neither smiles nor money for her, It's time to empower and start a big change together!
This can be done by first of all by listing all the tasks being done and then calculating the value that one would have to pay if the same work done by her is given to somebody hired. For example, when she teaches her children she should be paid the same amount that is to be given to a tutor or a teacher with the same knowledge and has the same amount of patience when teaching her kids. Let's start a significant change. Doing the dishes, vacuum cleaning, washing the clothes, All day she is engaged in scrubbing the floors. She likes her house neat and tidy, works all day long even when she has no inclination, She makes her home well-ordered even if it is the messiest in the nation, There is neither smiles nor money for her, It's time to empower and start a big change together!
EincoCnroicmkiects -SHAGGUN SRIVASTAVA 12-N Economics is one of the most versatile subjects having a great applicability in the modern world. It determines how things happen around us. From wars to cricket to how we divide our limited time between studies and leisure, economics is the driving force behind all. Even the polity and society revolve around the economy of a country. Cricket is one of the most popular sports in the world having a number of economic benefits. A cricket match generates revenue through the sale of parking and match tickets, tourism, sale of various products during the match, sports equipment bought for the players etc. It also creates a number of employment opportunities for the players, stadium staff, umpires, commentators etc. In India, Cricket accounts for 85% of the sports economy. The BCCI earns a large sum as revenue( Rs. 4000 Cr) from IPL. The IPL, itself, has a whopping brand value of $4.4 Billion. This article presents an insight into the three major economic applications in the field of cricket.
Monopsony, as defined by Oxford Dictionary, is a market situation when there is only one buyer. In case of Indian Cricket, the buyer is BCCI. A cricketer can’t get to the highest level unless he is selected by the BCCI in the National team. So, the situation is such that if you get selected by the BCCI , you get a once in a lifetime opportunity but if you don’t, you just languish in the shadows. Indian Premier league is there and one might make a mark in it but it definitely isn’t the highest level. On the other hand, Tennis is an individual sport and a tennis player is not selected by anyone. His success or failure solely depends on his ability and not on the whims of a board. Opportunity cost, according to In this case, the team should Investopedia, is the cost of an be more worried about running out of players than of time. In alternative that must be contrast, in T20 if a team needs foregone in order to pursue a 20 runs in 3 overs with 7 certain action. Cricket also wickets left , then the priority follows the law of opportunity should be time over players. cost. In cricket, the trade off is Hence, every point in a cricket between time and resources i.e. players. For example, if in a match requires careful test match, a team has 2 days consolidation wherein the to score a total of 300 runs and team captain and coach weigh on the first day itself, the team the opportunity cost of time scores 150 runs for 7 wickets. and players with respect to each other.
Law of diminishing marginal utility states that as a consumer goes on consuming more and more units of a commodity, the utility that he derives from each unit goes on decreasing and when the number of units of a good decrease, the utility derived from it increases. In cricket, as the batting team proceeds in the match, the marginal utility of balls increases as the number of remaining balls decreases. Each ball becomes more valuable to the team as they have a lesser number of balls to score runs. Similarly, for wickets, as the wickets fall, the utility of the remaining wickets increases. It becomes even more crucial for the batting team to save their wickets as otherwise they will eventually run out of players and lose the match. On the other hand, the number of runs scored present an exception to this law, as more runs imply more utility for the batting team.
Economics and Enviroment Energy and Climate change are the biggest issues of the 21st century. For climate change, the consequences of human activity are real, but the magnitude of those activities and especially its economics are rarely examined. Even changes of 1 to 3% in the global economic system would amount to trillions of dollars. Now we have ignored the agricultural and manufacturing sector, and thus, the other sectors may suffer now. We will have to devise new ways to produce goods and food sustainably. We are now at a very historic moment of our time. There are many challenges ahead of us. A group of scientists in Spain were not able to find a single reason that it is not the future. Back in 1945, the world population was 1.8 billion. In one generation we have gone from 1.8 to cross 7 billion people and may cross 10 billion in 2030. So now, the demand will increase. There are more people, who want to consume more. They want more houses, that is land. They want more cars, in turn fuel, and will need more food, in turn the natural resources of agriculture.
And the fundamental problem in Economics is going to be of more significance now because population is going to put pressure on the limited resources over our planet. They will consume more and thus will emit more of greenhouse gases. So more pollution and more health problems. We will continue to generate more industrial waste. There's a direct correlation between a rise in temperatures and our ability to contaminate and emit pollution. A panel of around 3000 Scientists in the US agreed and stated that climate change is not only real, but it's us human beings who are accelerating this process. As it's true, we will have to adapt and make changes in the economy. We need to get behind innovation and lead the world in cleaner energy. The country that will lead the world in clean energy, will lead the global economy in the coming centuries. Renewable energy in top economics such as the US is already being deployed with greater efforts. Investment in clean energy is the investment in the future in the truest sense. More money is being invested in Research and Development, than ever before. Technology and renewable development have become the main concerns.
No doubt, the prices of photovoltaic cells and solar power systems are falling too. In our country too, the resources are shrinking. India is the 3rd largest manufacturer of cement production globally. But the limestone deposits are shrinking now. We don't have land or soil. And data suggests around 70% more of the buildings are waiting to be completed. With the current state, we will need to have 3 more earth to fulfill the needs of the present population. The Paris agreement and the Government at various places are looking at growing sustainably, with equitable resources. The problem also lies in recycling and down-cycling things. But both wind and solar energy generation requires copper, glass, and silica. Presently, 99% of any product or material is actually wasted. We need to replace mining of the virgin materials with secondary resources (:the by-products). Innovation is needed in this sector. For example, we can have modular designs of goods (such as phones) where we can just replace the part that is not functioning and not replace the entire commodity. Repairs are encouraged in countries such as Sweden, to reduce waste. There is a silver line too, that has started appearing recently. Entrepreneurs do collaborate with the waste sellers, to bring innovation into effect. So what do we need to give our future generations? Scarcity or Innovation?
IS ECONOMICS AN EXPERIMENTAL SCIENCE? The fact is, economics is not an experimental science and cannot be. \"Natural\" experiments and \"quasi\" experiments are not in fact experiments. They are rhetorical devices that are often invoked to avoid having to face real econometric difficulties. Natural, quasi, and computational experiments and regression discontinuity design can all when well applied, be useful, but none are panaceas. The essay by Angrist and Pischke, in its enthusiasm for some real accomplishments in certain subfields of economics, makes broad claims for its favored methodologies. Recent enthusiasm for single-equation, linear, instrumental variables approaches in applied microeconomics has led many in these fields to avoid undertaking research that would need them to think formally and carefully about the central issues of non- experimental inference -- what I see and many see as the core of econometrics. Providing empirically grounded policy advice necessarily involves confronting these difficult central issues.
BE GENTLE WITH YOUR MIND. Your mental health matters, too. Be mindful of yours. HELP SPREAD AWARENESS ABOUT MENTAL HEALTH. VISIT WWW.REALLYGREATSITE.COM FOR MORE.
wan India,worry india Over 30 million people have been infected by COVID-19 in India. In 2021, the number of cases himadplerimseenn etaxtpioonneonftialollcykwdoitwhnin a span of two months. Despite the measures including travel bans in India and worldwide, there had been an increasing incidence of COVID 19. The number continued to rise as lockdown measures were being relaxed in varying capacities across states. A high percentage of healthcare in India is provided by the private sector which mostly only provided minimal services during the lockdown due to which we formulated that the immediate consequences of lockdown would have a negative impact on the general health, mental health, and social well-being of the population. IMPACT OF HEALTHCARE SYSTEM IN RURAL AREAS DUE TO COVID- 19 The health care services and systems in India are still developing and have challenges of workforce shortages, poor infrastructure, and quality of care. The healthcare system in rural India faces a chronic shortage of medical professionals which is detrimental to the rural health system in terms of the quality and availability of care for rural people.
The government’s focus has been on curative care, while poor infrastructure and poor coördination between the various departments make it difficult to tackle public health emergencies such as COVID-19. The health care system is not adequate or prepared to contain COVID-19 transmission in the rural areas, especially in many northern Indian States because of the shortage of doctors, hospital beds, and equipment, especially in densely populated underserved states. Public health challenges, including the elimination of persisting communicable diseases like Tuberculosis and ensuring equitable health care, add to the challenges ahead, with the emergence of the Covid 19 pandemic. IMPACT ON HEALTHCARE COMPANIES DUE TO COVID-19 While some measures had been implemented to contain the spread of COVID-19, they had resulted in significant operational disruption for many companies including those in the Indian healthcare industry. Staff quarantine, supply chain failures, and sudden reductions in customer demand have generated serious complications for companies across a wider range of sectors. The revenue lost in that period represents a permanent loss which would take a lot of time to recover. Despite the current crisis being a healthcare issue, the private healthcare system in the country continues to reel under the negative impact of COVID-19. There had been a significant drop in both in-patient and out- patient footfall for private hospital chains during the lockdown. The inability of new centers/hospitals to start generating cash, debt repayment obligations, and increased scheme revenues are some of the many factors impacting cash flow.
GOVERNMENT INTERVENTION With no immediate sign of the pandemic regressing, the situation can become tense in the future. Hospitals, whether big or small, have limited resources and require support from the government. Through faster payments for treatments under government schemes; GST rate reduction on COVID-19 related supplies such as testing kits, drugs, and consumables; cheaper credit facilities for larger hospitals; Standardisation of COVID-19 costs across the country are some of the measures that the government had done to nip the effects of the pandemic on an already fragile healthcare system. CONCLUSION The coronavirus pandemic has resulted in multiple challenges for both developed and developing countries. It is our responsibility to judiciously use healthcare resources with the aim of protecting our frontline warriors. With no hope of treatment soon, the supportive care of infected patients and various preventive strategies are going to help us to contain this pandemic
Behavioural Economics and its growing significance - Suhani Vats, 11 U Behavioural economics is a relatively new field of economics that combines insights from psychology, judgment, and decision making, and economics to generate a more accurate understanding of human behavior. Back in the 1990s, Richard Thaler, considered to be the father of behavioural economics, challenged the view that human behaviour can be easily explained by relying on an assumption alone - our preferences are well-defined, rational and stable throughout. He did so by jotting down and pointing out the anomalies and uniqueness in people’s behaviour which cannot be simply explained and justified by predominant economic theories. The inability of the standard economic theory to explain the psychology behind human economic behaviour and decisions led to the establishment and significant propagation of behavioral economics.
In 2017, economist Richard Thaler was awarded the Nobel Memorial Prize in Economics Sciences for his contributions to behavioural economics and his promising work in establishing that people are predictably irrational in ways that defy economic theory. The rising significance of behavioural economics is completely justified, given the wide range of applications it has. Human decision-making is a true gift of behavioural economics. Alternative behavioural models of individual choice have helped us to understand the functioning of economic institutions. On the normative side, behavioural modeling can help us to design better institutions. This can take place not only through better understanding of how the institutions work, but also through better understanding of individual needs and the concept of welfare. Various methods have been emerging seeking to analyse normative policy through behavioural economics. Also, practicing behavioural economics requires one to modify, not abandon, the key methodological principles of modern economics.
Behavioural economics also has its applications in the indispensable field of law. Using the vehicle of “debiasing through law,” behavioural law and economics may open up a new space for legal interventions that recognize human limitations and attempt to steer individuals away from mistakes without taking the steering wheel from the individual’s own hands. The health sector is also full of institutions and decision-making circumstances that involve friction in markets and cognitive errors by decision makers. Stress of decision-making, anxiety, professionalism, insurance coverage, and lack of information make decision-making in health- related questions particularly relevant for behavioural analysis. Behavioural economics shall soon be changing the approach which people have always had towards economic development and the application of economics as typically limited sometimes. It is indeed an exciting endeavour and will establish itself as truly significant in the near future.
The Science of Neuroscience - SAANVI PANDEY 10G We are constantly making financial decisions ranging from small and mundane to life changing. These everyday decisions multiplied by billions of people form the basis of the worldwide economy. Neuroecomics is the study of how organisms make value-based decisions and how these decisions are expressed neurally. The main goal of neuroeconomics is to understand the brain mechanisms that are responsible for making these evaluative processes. Paul W. Glimcher is an American neuroeconomist, neuroscientist, psychologist, economist, scholar, and entrepreneur. He is known for his central role in founding and developing the field of neuroeconomics which takes an interdisciplinary approach to understanding how humans make decisions. Scott Huettel, a professor of psychology and neuroscience at Duke University says Neuroeconomics studies those situations where choices are clear-cut or rational, and involve unacknowledged factors and risk - something economics has had a hard time explaining.
So then the question arises, how does the brain actually work in decision-making ? To learn more about these decisions scientists measure brain activity as people complete economic tasks. For example, Running brain scans as people play a simple double- or-nothing game. When a player decides to risk it all to double their winnings, activity increases in a part of the brain called the insular cortex. Scientists hypothesize that the networks of the insular cortex interact with other brain areas, including parts of the limbic system that functions in learning, memory and emotion, to help the player picture the negative and positive aspects of taking such a risk. On days when male traders had higher testosterone levels than average, they took larger risks. Isn’t it fascinating? With millions of dollars on the line, hormones could be making the difference between a good day at the market and a very bad one. Some firms are now using brain imaging technologies like MRI(Functional magnetic resonance imaging) and EEG( Electroencephalogram) to measure how the brains of prospective buyers respond to advertisements in real-time. For advertisers, it’s advantageous to use measurable brain reactions to craft effective messaging - a discipline known as “neuromarketing\".
When Economics meets Psychology - Ishaan Singh Sarna 12K “Rational agents”, “utility maximization”, “profit-seeking behavior” - these are terms that all of us, as students of economics, probably hear on a daily basis. Classical economics is premised upon the basic assumption that all agents in an economy are perfectly rational, i.e. their primary motive is to maximize their utility (the total satisfaction derived from the consumption of a commodity) and expand their profits. The individual, in classical economic terms, has “perfect” information about the market and acts independently to make a choice that is most rewarding for him/her. That might seem as easy as ABC. But, here’s a secret: it’s not. Realistically speaking, individuals - like you and myself - are not always perfectly rational. We may, sometimes, act intuitively and impulsively instead of planning our steps using reason and logic.
Humans are likely to be short-sighted, selfish, and unreasonable while making decisions. This forms the foundation of a rather recent field of mainstream economics, that takes a more realistic view of human decision-making by studying the various biases and tendencies that influence people’s cognition, known as behavioral economics. Contrary to classical economics, behavioral economics deals with the deviations from the model of homo economicus or the rational man and “explains human behavior through the lens of social preferences, heuristics, and norms”. The assumptions and findings of behavioral economics do not, in any way, negate those of classical economics but only add a layer of complexity to them. The central concept of behavioral economics is bounded rationality. This term, coined by Nobel Memorial Prize recipient Herbert Spencer who proposed the idea that humans have limited information-processing capabilities, is simply a reiteration of the idea that humans are not rational and there may be certain biases at play when they make decisions. Traditional economics makes three key unrealistic assumptions about human behavior: They have unbounded rationality, unbounded willpower, and unbounded selfishness. However, behavioral economics debunks all three of them.
The findings from a study conducted by Colin Camerer and other researchers on taxi drivers in New York City, in the mid-1990s, provides an accurate example of suboptimal/irrational behavior in economic decision making. These drivers paid a fixed amount to rent their cabs for twelve hours and kept all revenue to themselves. The ideal (profit-maximizing) strategy would be to work overtime on ‘good’ days (rainy days or days with a festival in town) and quit early on ‘bad’ days. However, the researchers assumed that if they set earning targets for each day and considered any shortfalls relative to that target as a loss, they would likely quit early on good days and work longer on bad days. Unsurprisingly, that is exactly what happened. Willpower relates to self-control which is our ability to delay gratification and resist impulses to avail immediate rewards. We surely do not have unbounded willpower, as we often find ourselves in a situation where we have spent, eaten, drunk, smoked, or exercised too much. It is a natural human tendency to lack self- control. Lastly, people are not selfish as classical economic theory assumes. Even though we may sometimes act to serve our own interests, we do tend to act selflessly. Each one of us is concerned, to differing degrees, about the well-being of others. According to the India Giving report 2019, released by Charities Aid Foundation, nearly three-quarters of India’s adult population donated money to a good cause (donating to a charity, religious organization, or sponsoring someone).
Another key concept of behavioral economics is the ‘nudge’ or Nudge Theory. Nudge literally means a light push or touch. In economic terms, it refers to indirect suggestions or clues given to people who influence their decision-making without them even realizing. The best example of this would be that of a school canteen. To discourage the consumption of unhealthy snacks such as chips, candy bars, or canned beverages, the authorities could place healthy alternatives such as dried fruits and yogurts on shelves at eye level. The students would naturally reach out for the healthy snacks, without them even realizing the gradual shift in their decision-making behavior. Various other principles influence our decision-making such as framing, availability heuristic, loss aversion, present bias, etc. It can also be applied to many fields such as finance, marketing, political science (the best example being the Brexit referendum), international relations, etc. Thus, behavioral economics can help us better understand the nature of human decision-making and its implications on economics as it focuses on its psychological, social, and emotional aspects.
1991 REFORMS - Ayush Jain 11W India was going through one of the darkest periods in its post- Independence history after the assassination of Rajiv Gandhi while the new Government was on borrowed time, rapidly running out of funds to pay its foreign debts. But the winds of change were blowing in favour of technocrats such as Manmohan Singh. Soviet communism had recently imploded, capitalism was firmly ascendant. The scene was set for India, too, to enact the basic tenets of a free-market reform package broadly known as the ‘Washington Consensus’. In 1991, India’s capita income was just $360 a year, having been overtaken by several “miracle economies” of Asia growing at 7% per year or more. India was a leader of the G-77, a group of poor countries constantly demanding more concessions to develop. A million statistics cannot convey the qualitative transformation of life from the license-permit raj of the Nehru-Indira era. Central planning then claimed India was best off when people had no power to decide what to produce, consume, or import. One could not produce or import anything without a license. Raising productivity was not rewarded but punished with jail for exceeding licensed capacity. This made almost everything scarce in ways Indians under 45 years will scarcely believe today. In the 1970s, one had to queue up for seven years for a car and nine years for a scooter.
Government-owned HMT had a monopoly on watch production, and getting a watch was so difficult that it was often part of a bride’s dowry. The license-permit raj meant that till 1980 India grew at 3.5% annually, half the rate of outward-looking market-oriented Asian tiger economies. India patronizingly pitied the tigers (like Singapore) for being western puppets. Alas, the puppets grew richer than their colonial masters, while India remained poor... Today, socialists still moan about 30 years of reform saying it neglects inequality. They forget that Indira Gandhi in the 1970s imposed an income tax of 97.7%, plus a wealth tax of 3.5%. A Finance Ministry official said at a post-budget press conference that if a rich man invested all his wealth in National Savings Certificates at 7% interest, the most he could earn after taxes was Rs 25,000.. Creeping reforms began in the 1980s but became official policy in 1991. Some say liberalization went too far. No, it was only half- baked, maybe quarter-baked. The Heritage Institute’s Index of Economic Freedom puts India at just 121st in the world, in the category “mostly unfree.” When Manmohan Singh launched economic liberalization in 1991, India was the world’s biggest beggar for aid. Today India is a net aid donor, having committed $30.6 billion to Asian neighbours and Africa.
FUTURE OF ELECTRIC VEHICLES - Krishnna Nayyarr 12S Electric Vehicles are the future of transportation, be it four-wheel vehicles, two-wheelers, or airplanes. These vehicles are typically powered by rechargeable lithium-ion batteries and produce zero carbon emissions and hence are not harmful to the environment. While the sale of conventional passenger vehicles and two- wheelers in the country declined over 9 percent and 13 percent, respectively, in FY21, electric two and four-wheelers bucked the trend and posted impressive growth. Sales of electric two- wheelers surged over 64 percent, while four-wheelers grew over 68 percent. Yes, this is on a small base, but encouraging. In a year where nearly two months were lost due to lockdown, it is the clearest indication yet that after sputtering for years, the electric mobility story is on track towards an inflection point when it will become mainstream. To add to this, companies such as Tesla, BMW, Audi, Porsche, Mercedes Benz, etc are the leading names in today’s electric car market. Boeing, an Airplane manufacturer has successfully produced an electric passenger airplane that can travel up to 50 miles and companies like Hero Electric, Bajaj, TVS, etc are currently producing electric two-wheelers in huge numbers.
One of the most reputed two-wheeler manufacturers in the world, Harley Davidson, an American Motorcycle Manufacturing Company has announced its first electric bike. This explains that the most prominent and iconic automotive companies believe in an Electric Vehicle dominant future. We must understand that vehicles that run on fuels like Petrol and Diesel are continuously causing irreversible damage to the environment. Our shift to electric vehicles is overdue now. Most importantly we are running out of oil reserves which allow us to derive conventional fuels. Countries like Norway, Iceland, and Sweden are leading the change, with plug-in electric vehicles accounting for 74.8%, 45%, and 32.2% respectively in 2020 and Mercedes-Benz maker Daimler plans to invest more than 40 billion euros, or $47 billion, between 2022 and 2030 to develop battery-electric vehicles, and be ready for an all- electric car market by 2030. However, we must also note that Electric Vehicles do not come for cheap in today’s date. A lot of research and development is underway to make these vehicles more affordable and widely available to the masses across the globe. Governments are cutting down taxes and duties imposed on electric vehicles to attract the attention of the general public looking out for a new car. In India’s case, homegrown auto giant Tata Motors has said that it plans to price its green cars at “not more than 15-20% premium” to conventional petrol/diesel vehicles while offering a battery range at least above 200km on a single charge.
EVs are touted as a one-stop solution to many problems in India. These include those related to air pollution and steep oil import bill that depletes our foreign exchange reserves. India consumes 29.4 percent of the world’s oil and crude oil accounts for more than a quarter of its imports. It spent over $100 billion on oil imports in FY20. According to a report by Niti Aayog and Rocky Mountain Institute, a reduction of 156 million tonnes of oil equivalent worth Rs 3.9 lakh crore is possible by 2030 if EVs account for 40 percent two-wheelers, cars and SUVs, and 100 percent commercial vehicles and three-wheelers. India is also the world's third-largest emitter of carbon dioxide (CO2) at two million kilotons behind the US and China. In the national capital of Delhi, pollution due to particulate matter regularly exceeds the World Health Organisation's limits by a factor of 7-12. More EVs mean fewer carbon emissions. There is no doubt that Electric Vehicles are the future, I believe that Governments across the world should invest as much as possible in the development, research, and manufacturing of electric vehicles. They should build appropriate infrastructure for the operations of electric vehicles by setting up Electric Vehicle Charging points across cities and towns, promote electric vehicles, give incentives to the general public on purchasing electric vehicles, and set up annual targets for the sales of electric vehicles.
Economics and Environment - Ashmi Shriya 12N Energy and Climate change are the biggest issues of the 21st century. For climate change, the consequences of human activity are real, but the magnitude of those activities and especially its economics are rarely examined. Even changes of 1 to 3% in the global economy system would amount to trillions of dollars. Now we have ignored the agricultural and manufacturing sector, and thus, the other sectors may suffer now. We will have to devise new ways to produce goods and food sustainably.We are now at a very historic moment of our time. There are many challenges ahead of us. A group of scientists in Spain were not able to find a single reason that it is not the future. Back in 1945, the world population was 1.8 billion. In one generation we have gone from 1.8 to cross 7 billion people and may cross 10 billion in 2030. So now, the demand will increase. There are more people, who want to consume more. They want more houses, that is land. They want more cars, in turn fuel, and will need more food, in turn the natural resources of agriculture.
The fundamental problem in Economics is going to be of more significance now, because population is going to put pressure on the limited resources over our planet. We will consume more and thus will emit more of the greenhouse gases. So more pollution and more health problems. We will continue to generate more industrial waste. There's a direct correlation between a rise in temperatures and our ability to contaminate and emit pollution. A panel of around 3000 Scientists in the US agreed and stated that climate change is not only real, but it's us human beings who are accelerating this process. As it's true, we will have to adapt and make changes in the economy. We need to get behind innovation and lead the world in cleaner energy. The country that will lead the world in clean energy, will lead the global economy in the coming centuries. Renewable energy in top economics such as the US is already being deployed with greater efforts. Investment in clean energy, is the investment in future in the truest sense. More money is being invested in Research and Development, than ever before. Technology and renewable development have become the main concerns.
No doubt, the prices of photovoltaic cells and solar power systems are falling too.In our country too, the resources are shrinking. India is the 3rd largest manufacturer of cement production globally. But the limestone deposits are shrinking now. We don't have land or soil. And data suggests around 70% more of the buildings are waiting to be completed. With the current state, we will need to have 3 more earths to fulfill the needs of the present population. The Paris agreement and the Government at various places are looking at growing sustainably, with equitable resources. The problem also lies in recycling and down-cycling things. But both wind and solar energy generation requires copper, glass and silica. Presently, 99% of any product or material is actually wasted. We need to replace mining of the virgin materials to secondary resources (:the by products). Innovation is needed in this sector. For example, we can have modular designs of goods (such as phones) where we can just replace the part that is not functioning and not replace the entire commodity. Repairs are encouraged in countries such as Sweden, to reduce waste.
There is a silver line too, that has started appearing recently. Entrepreneurs do collaborate with the waste sellers, to bring innovation into effect. For example, the old aluminum can is a material for a Jaguar Car. Thus necessity is the mother of invention. But let's not be too late in understanding the crux of Economics. So what do we need to give our future generations? Scarcity or Innovation?
NFTS Financial Assets or worthless pictures? An NFT is a digital asset that represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and are generally encoded with the same underlying software as many cryptocurrencies. NFTs are one of a kind, or of a very limited run, and have unique identifying codes. Essentially, they create digital scarcity, contributing to their future appreciation in value. How do th ey work? NFTs exist on a blockchain, which is a distributed public ledger that records transactions, similar to cryptocurrencies. They are essentially the virtual versions of collector’s items. Once you purchase an NFT using any cryptocurrency, you get the exclusive right to ownership of that NFT. You can now choose to further resell it for a profit if the condition arises. Are NFTs worth it? Many NFTs show great appreciation in price after a while, however, they are still very risky assets. Whether an NFT increases in value depends on its demand and whether someone is willing to pay more for it. This makes it entirely speculative and based on other people’s wants. Keeping this in mind, if you wish to own a particular artwork, and have the money to spare, you may buy an NFT.
How to buy NFTs? To begin with you need to purchase cryptocurrency and set up a crypto wallet. Metamask is one of the most popularly used crypto wallets. You may use several online platforms such as WazirX or CoinBase to purchase cryptocurrencies. Most NFT transactions are settled using Ethereum currency. Once you have purchased the desired amount of cryptocurrencies you can transfer them to your crypto wallet and begin buying NFTs. To do that, one can use NFT trading websites such as OpenSea, Rarible or in some cases, creators’ personal websites to conclude the transaction. NFTs are an upcoming digital art form that can revolutionise art, music and other creative fields. It would be unfair to call them “worthless pictures” because although not similar to traditional investments, they can be used for investment purposes in the modern world. However, buyers must be aware of the various risks present and only then should they go forward and purchase them. Krish Gupta 12R
Gender and Income Inequality “It is time that we all see gender as a spectrum instead of two sets of opposing ideals.” Gender equality has come to be viewed as a Utopia now, and rightly so; considering the fact it is still a pipe dream. Women have been facing wide disparities when it comes to the wages they are paid in their workplaces. India ranked 108 in World Economic Forum's (WEF) gender gap index in 2018, which is the same rank it held in 2017. Apart from the gender pay gap, India is also facing a huge pay disparity among the categories of organised and unorganised sectors, rural and urban areas and regular and casual workers. The Constitution of India clearly discourages this ever-widening gender wage gap through its various provisions. As per Article 16, all citizens have a right to equality of opportunity to matters of public employment or appointment to any office under the state. Article 38(2) strives to reduce inequalities in income among individuals and Article 39 promises equal pay for equal work for both men and women. However, this is what the Constitution guarantees and strives to achieve. The Supreme Court of India has upheld the constitutional validity of the principle of equal pay for equal work. In another landmark case, the Supreme Court held that men and women employees
should be paid equally for the same work. Recently, the Code on Wages, 2019 of India (Code on Wages) has been notified and it received the Presidential assent on August 8, 2019. The Code of Wages consolidates four national level labour laws on wages, being the ERA, Minimum Wages Act, 1948, Payment of Wages Act, 1936 and Payment of Bonus Act, 1965. The first set of provisions of the Code of Wages relates to anti- discrimination, prohibiting discrimination against employees on the ground of gender in matters relating to payment of wages, covering the LGBTQ+ community as well. The Code of Wages also prohibits discrimination while recruiting any employee and in the conditions of employment, except in cases where employment of women in such work is prohibited or restricted under any law. Although India has come a long way to establish itself as a developing country, while also addressing the issues of gender equity and gender wage gap; thinking that enough has been done is jeopardising its dream of being a Superpower someday. The measure of a country’s development and growth is not only its GDP, but also its wages and their equitable distribution. The government needs to promote and assert the significance of the principle of equal wages, starting with itself! India will soon be celebrating 75 glorious years of its independence. The government should focus on formulating and implementing more policies to reduce the wide gender gap prevailing in India. This will help not only in ensuring equal opportunities for all, but also set up India as a liberal country, ready to address the global challenges and triumph over them. Suhani Vats 11U
Balding Economics Economics is a subject Looking on aspects It talks with numbers Grounds on which few encumber Going down with statistics You don’t need to be aesthetic When numbers lie Economists often justify Politics often hails economics Which ruins the life of students studying psychometrics Sen, Talib, Kahenman go along with the truth I give no blame, It feels lame Keeping in mind real ruth Maybe I think too much This world stands on a crutch Going beyond its miles A white paper among piles. Trials are head With fat styles Balding indeed came after the turnstiles. Ananya Deep 10L
The Economic Value of a Housewife's work All around the world, women spend excessive time on unpaid homework - ranging from a maximum of 400 minutes per day in Iraq to 200 minutes per day in Taiwan, according to the International Labour Organisation. On average, men spent 83 minutes in unpaid care and homework while women spent three times more at 265 minutes. But a very fundamental and a very basic question originates: So should housewives be paid wages for doing largely thankless household work? India's 160 million homemakers clean, tidy, cook, wash up and manage the family budget. They fetch food, water, and firewood, and give care to children and their in-laws without complaining a mite. Therefore, the answer is a clear and obvious YES. One way to eliminate gender equality is to calculate The economic value of the work being done by a housewife. This can be done by first of all by listing all the tasks being done and then calculating the value that one would have to pay if the same work done by her is given to somebody hired. For example, when she teaches her children she should be paid the same amount that is to be given to a tutor or a teacher with the same knowledge and has the same amount of patience when teaching her kids. Let's start a significant change.
Poem: Doing the dishes, vacuum cleaning, washing the clothes, All day she is engaged in scrubbing the floors. She likes her house neat and tidy, works all day long even when she has no inclination, She makes her home well-ordered even if it is the messiest in the nation, There is neither smiles nor money for her, It's time to empower and start a big change together! Sheen Madan 10G
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