Inflation management is one of the hardest tasks an economic policymaker has to undertake. It appears, at first sight, that one can rely entirely on commonsense to carry out this task. But that will be a cardinal mistake. While inflation policy does require judgment and intuition, it is...

This paper develops an index for measuring the economic power of governments viewed as entities in themselves. The basic idea is to encapsulate the economic representative power of a nation’s government in the international arena in as simple and parsimonious a manner as possible. For...

The paper studies the relation between globalization, inequality and marginalization, within and across nations. It reviews the existing evidence on globalization and global inequality and argues, using a simple theoretical model, that the two are inter-connected. It discusses policy alternative...

The paper argues that economism and, in particular, the individual drive to maximize utility and amass profit are not enough to ensure the efficient functioning of an economy; and that even for elementary economic activities, such as trade, exchange and contracting to occur smoothly, it is...

Using a model of O-ring production function, the paper demonstrates how certain communities can get caught in a low-literacy trap in which each individual finds it not worthwhile investing in higher skills because others are not high-skilled. The model sheds light on educational policy. It is...

Firms often give away free goods with the product that they sell. Firms often give stock options to their top management and other employees. Mixing these two practices—giving stock options to consumers who buy the firm’s product—, creates a deadly brew. Large numbers of...

The financial crisis of 2007-09 began as a local problem in the mortgage finance market in the United States and Europe but, within months, escalated into a general global financial crisis, resulting in collapsing investment not just in developed nations but also in Shanghai, Rio and Mumbai, and...

Social scientists often emphasize how ‘culture’ and ‘social norms’ can be important determinants of economic behavior and development. This raises questions of the relative importance of economic incentives and these other more social variables, like culture, and of how...

This paper tries to advance the perspective that the poor and the marginalized in society lack a sense of “participatory equity,†by building a new model where a person’s community identity matters, ex post, in determining if he or she will be poor, even though (unlike in the...

The paper argues that if the Chinese economy had failed, mainstream economics would have described this as completely predictable, given the extent and nature of involvement of the Chinese state in the functioning of markets and the economy. The fact that China has succeeded therefore should...