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. Vani Sen 10G
The role of Statistics in every aspect of life Statistics is relatively a very important subject and the proper knowledge of statistics is very helpful to understand the difficulties of every aspect of life and it provides us with solutions to deal with them. Statistics is defined as the collection, organisation, presentation, analysis and interpretation of numerical data. It provides us the map for tackling the problems related to understanding complex data. The first step towards this is the collection of data, the technique depends on the objective of th e study. The second step is the organisation of the data in a proper form which involves editing and classification. After classification, the third step is the presentation of data in a suitable manner in the form of a diagram, table, text or graph. The fourth step is the analysis, with the help of simple mathematical techniques. These include majors of central tendency, measures of dispersion, correlation, regression etc. The fifth step involves the interpretation of data, it is the last step of statistical methodology; it involves statistical thinking, skills and experience in order to derive meaning from the analysed data. The interpretation provides the final conclusion drawn from the data. How does statistics work ? It converts the complex data into simplified representations such as graphs, tables, diagrams etc. and the data becomes easier for the average civilian to interpret.
It makes comparison of facts easier and facilitates planning and policy formulation. It helps in forecasting and enlarging individual knowledge and experience. There are a lot of mathematical calculations which make it easier for us to understand the raw data, such as mean, median, mode, standard deviation, coefficient of variation etc. Statistics is important in various fields, such as government planning and businesses. The government collects taxes to run various operations such as defence, healthcare, civil well being, education and transport to make sure that the government is not over spending, Statistics plays a huge role in helping determine the actual cost of these operations, labour required and estimated time consumption, while statistical data and methods play a vital role in understanding and solving economic problems such as poverty, unemployment, disparities in the distribution of income, wealth and other resources. It gives us a good comparison of various markets as well. In businesses, statistics helps the businessman to discover the minimal running cost of various operations such as manufacturing, labour wages, adequate profits, market competitors, and gives an overall progress report to the businessman. It gives us a good comparison of various markets as well. However there are limitations to this practice as well: it does not study the qualitative phenomenon, it does not deal with individuals, the results are true only on average and can be misused. Statistic laws are not precise and only experts can make the best possible use of statistics. The distrust of statistics means lack of confidence in Statistical Methods and Statements, and in spite of the services provided by statistics, considerable distrust exists in the minds of the
people with regard to its reliability and usefulness. I would like to conclude by saying that Statistics is a very helpful and an essential practice. Krishnna Nayyer 12S
Central Bank Digital Currencies Adapting to a new age The rise of cryptocurrencies strikes at the core of our modern monetary system. With the emphasis being placed on decentralization of our financial system and the increasing controversies surrounding the SWIFT system due to attempts by the US to use it to strongarm rival nations, it is important to consider a world with a single crypto-currency. Among the less discussed threats that a single decentralized currency would pose is that it would make our world more vulnerable to recessions. The Greek Debt crisis is a great example of what happens when a nation’s currency is not able to adjust to its financial situation. Under our current monetary system in which most currencies float freely, whenever a country faces an economic crisis, the value of its currency falls, allowing the economy to recover by encouraging exports. This could not occur in Greece because its economic situation did not sufficiently impact the rest of the Eurozone countries to cause a substantial fall in the Euro’s value. Similarly, it is to be expected that in a world with a single decentralized currency, the counter-cyclical measures that central banks usually take in a recession such as reducing interest rates and increasing money supply would simply not be possible.
Central Bank Digital Currencies (CBDCs) are a way for central banks to adapt to the digital age. There are two major proposals for how CBDCs can work: First, the central bank can take over the role that commercial banks play by allowing people to form deposit accounts with the central bank. The actual servicing and technical maintenance of the accounts would likely be carried out by a third-party firm. Proponents of this approach argue that it would provide better protection against money laundering and make the financial system more secure. However, this would aid the rise of cryptocurrencies since it further centralizes the money supply and creates a single ledger of all transactions in a nation. The second approach is to make CBDCs similar to cryptocurrencies in that they would circulate in a decentralized way and without a central ledger. This approach would maintain the anonymity of banknotes while allowing central banks to regulate the money supply. It is some variation of this format that nearly 60% of the world’s central banks are testing. CBDCs would also fundamentally change the role of banks. Since institutions would trade using CBDCs rather than bank deposits, banks would no longer be able to create demand deposits. In addition, with the entire money supply now exclusively controlled by the central bank, banks would also not be able to create credit. Economists believe that this would improve financial stability by eliminating the ‘too big to fail’ concept since banks would have to downsize to adjust to their new roles. However, to avoid such
drastic structural changes, central banks are experimenting with different ideas to preserve the crucial role that banks play. Bhavya Lakhina 12T
Cryptocurrency A passport to the future What is Cryptocurrency? With the increasing trend of online transactions, there is also a significant rise in online payments as technology is evolving towards contactless payments. Companies and consumers don’t prefer cash anymore, which can be seen by the sudden surge of Paytm and RazorPay users. When consumers can make payments at the click of a button, why would they prefer to go through the lengthy process of making physical payments? This emerging payment system, called Cryptocurrency, is a digital or virtual currency that serves as a medium of exchange. It uses cryptography to secure and verify transactions as well as control the creation of new units of a particular cryptocurrency. There have been several failed attempts at creating a digital currency during the 90s like DigiCash, Flooz, and Beenz owing to fraudulent transactions and financial difficulties. Due to the failure of these companies, the creation of a digital money system was considered futile until the Introduction of BitCoin. Bitc oin In early 2009, Satoshi Nakamoto, an anonymous programmer or group of programmers under the pseudonym, introduced BitCoin- ’A Peer-to-Peer E-Cash System’. It is viewed as
the first modern cryptocurrency, a medium of exchange that combines decentralized control, user secrecy, record keeping on a blockchain, and built-in scarcity. Bitcoin offers lower transaction costs than traditional online payment mechanisms and, unlike government-issued currencies, is operated by a decentralized authority. All transactions are checked by a huge amount of computing power. Tips to keep i n mind while investing Cryptocurrency is a risky business. Some tips to keep in mind include: 1. Proper Research Before investing, do thorough research on cryptocurrency exchanges and how they work. Get in touch with experienced investors, gain their knowledge and check their applicability before proceeding. 2. Storing Digital Currency When you buy cryptocurrency, you can store it on an exchange or in a digital \"wallet\". Carefully weigh the pros and cons of all types of wallets or exchanges before storing your cryptocurrency in them. 3. Making Diverse Investments Like investing in shares, one must maintain a diversified portfolio, similarly, while you’re investing in cryptocurrency, try and regulate between BitCoin and Altcoin till you find the right combination of both.
4. Being prepared for losses Cryptocurrency is always fluctuating, therefore one must be mentally and financially prepared to handle the ups and downs. If you can’t handle the dramatic changes in the prices and prefer stability, chances are, cryptocurrency might not be the right choice for you. Cryptocurrencies are here to stay and to change the world. Globally, people are investing in it to protect themselves against the devaluation of their national currency. While cryptocurrency seems like a passport to our future, we must note that currently, cryptocurrencies have a long way to go before they are recognized as a legitimate currency on par with the U.S. dollar, the Euro, or the Pound. Aarushi Aggarwal 12T
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