The Arthashastri

Authors: Ashmita Mehra and Gautam Sodani There exists a visible trade-off between female labor force participation rates (defined as percentage of women aged 15 and above in the labor force) and fertility rates (defined as total births per woman). This poses an important question in front of the economies of the world- 'to find the right amount of balance between women’s inclusion in the current labor market and new entries in the labor market in the future'. The opportunity cost of having gender inclusive labor markets at present is the future economic growth that can be accredited to an ideal (high enough) rate of fertility,   that potentially has to be foregone.  Historically, it has been a persistent belief that only women are supposed to look after children, especially when they are young. The absence of an institution that can act as a social support system for working women with young children is the root cause of such a trade-off. Cheng et al (1997) was successful in...

Batch of Pandemic and the Digital Divide in India Author: Gautam Sodani (7 Minute Read) The COVID-19 pandemic has thrown everyone's life into disarray and caused irreparable damage to many businesses all across the globe. Besides the toll on life and living, the year 2020 was ravaged by output and employment losses unprecedented in history, globally as well as in India. India’s GDP fell by 7.3% in fiscal year 2021 and the World Bank estimates global output to fall by 5.2% during the same period. While the severity of the effect varies from sector to sector, there are few sectors that have been affected the hardest. In India, some industries, particularly those that require a high level of contact, have been severely harmed, while others, such as agriculture and allied activities, information technology, highway infrastructure, railway freight, and domestic trade, have shown remarkable resilience in the face of the pandemic. Aviation, travel and tourism, and hospitality were among...

  Communism in the Vaccine World It is finally the time to introduce communism into markets involving large-scale humanitarian crises such as these. Co-authored by:  Varish Seth &  Gautam Sodani (9 Minute Read) The vaccine race has nearly come to an end with various pharmaceutical companies across the world having developed their own version of COVID-19 vaccine. The most prominent player which emerged out of this race was the US based Pfizer-BioNTech vaccine. Other major players included the Moderna, Johnson & Johnson, Oxford-AstraZeneca (Covishield), Sputnik V and Covaxin vaccines. However, today, when anyone thinks about a COVID-19 vaccine, the Pfizer vaccine comes to mind. Almost anyone who has a choice chooses this vaccine as it is widely regarded to be the most reliable and effective amongst its competitors. It has now developed a hegemony, perhaps not in the market as a whole but in the minds of the vast majority of people. Former US President Donald Trump's...

  The ‘Dharma Sankat’ of Petrol Prices Co-authored by: Gautam Sodani & Varish Seth Credit: OfferGrid (Pinterest) Prime Minister Narendra Modi, on 17th February 2021, said, “India imports more than 85% of its oil requirements and the recent price hike is due to the negligence of previous governments towards reducing India’s import dependence in the energy sector.” He obliquely pointed that this price hike is to curb the domestic demand of petrol and diesel (law of demand), which in turn will reduce our dependence on imports, and as a result we will look at domestic production of alternative sources of energy.  It is a fascinating ‘economic argument’ and a ‘vital step’ to make India Atmanirbhar in the energy sector, isn’t it? However, the Prime Minister seems to be totally ignorant of another basic economic concept called the ‘price elasticity of demand’ – which essentially renders his entire argument to be inherently flawed. Petrol and diesel are primary inputs for essentia...

  Rationality of an Irrational Consumer With rapid globalization and technological advancement in recent years, consumers have become lazy and more occupied.   Does this affect consumer rationality? The mainstream field of economics emanated and evolved rapidly when man realized there is scarcity of resources. And that’s why the archetypal economic theory of consumer says that ‘people should relish choices and make a rational decision out of their constrained budget and preferences they hold’. But sometimes making a rational choice could be exhausting such that anyone forced to make a number of decisions in a row is likely to appear as lazy and having too many choices can leave a consumer ending without a rational conclusion. That’s why ‘rationality’ of a consumer is often questioned in contemporary economics. Having choices or alternatives is good. It makes the market more competitive and paves the way for gains from trade. That's the view of neoclassical consumer th...

Consumer Behavior: Accumulated Demand and Recovery of Losses Let’s Recap: “Economics is a social science that deals with allocation of resources and concern with production, distribution, and consumption of goods and services.” The utility of a good determines its demand and productivity of labor and capital determine its supply, and subsequently, equilibrium is determined in the economy. But, in this micro-economic equilibrium setup, we often disregard one important component of demand and that is ‘taste’. Consumer preferences are defined as the subject of their taste of various bundles of goods. Tastes and preferences of consumers are very important in micro-economic analysis , especially in the short-run. Why not in the long-run? Because of their volatility and erratic nature. ‘Tastes and Preference’ often impact demand and supply in the short run and especially when there are temporary supply disruptions such that the good becomes scarce in a particular market area....