ECONOMICA

 The year 2021 has been a blockbuster year for the Indian startup ecosystem, which has led to their landmark growth. This, in turn, has transformed startups like UpGrad, PharmEasy, and Cred into a Unicorn in just a couple of years or, in some cases, even in months. This year alone, India has witnessed 42 startups transforming themselves into Unicorns. As a result, India has now displaced the UK to become the 3rd top country to host Unicorns, behind China and the USA. However, not everyone knows what a Unicorn is. So, lets take a brief look at what is a Unicorn and how India is picking up pace in creating more of them. What is a Unicorn? Unicorn is a term used in the venture capital industry to describe a privately held startup company with a valuation of over $1 billion. The reason a company is called a Unicorn is that just like the Unicorn (a fictional creature) these companies are rare. Today India has about 79 of these rare Unicorns of which 42 were born in 2021 itself. This means t

  Behavioural economics is a psychological study as it considers the economic decision-making processes of individuals and institutions. Behavioral economics brings psychology and economics together to explore why consumers sometimes make irrational decisions, and how and why their behaviour does not follow the predictions of economic models. It helps to understand why we fail to buy the product we ideally are supposed to and end up buying another one. While the field of classical economics states that decision-making is entirely based on theoretical knowledge and rational logic, behavioural economics allows one to study the irrational decisions made by humans.                                                                               Behavioral economics consists of various theories by several Nobel Laureates who have done notable work in the field. In the 1950s, the concept of 'Bounded rationality' was developed by Economics Nobel Laureate Herbert Simon . This the

While the popularity of cryptocurrency is on the rise as a medium of exchange and investment, there are worries about the volatility of private digital currencies available on the internet and how they might affect the currencies of countries in the long run. As a result, the concept of central bank digital currency (CBDC) is garnering interest among institutions and governments alike. Several initiatives are being undertaken in countries such as the US (Digital Dollar), China (Digital Yuan), Sweden, New Zealand, etc. With the RBI also set towards launching a CBDC, let us take a look at what a CBDC is and what its implications will be in the economy. What are CBDCs? Also known as digital base money or digital fiat currency, a central bank digital currency (CBDC) is the digital form of legal tender issued by the central bank of a country. It is similar to a fiat currency and is exchangeable one-to-one with the fiat currency. Only its form is different. It is backed by the credit of issu

  The evidence that doesn’t uphold the conventional economic thinking attached to the law of supply & demand.

C urrently, there is a huge debate about whether the Covid-19 induced economic crisis has pushed the major economies to stagflation. The debate is getting stronger in India, with the release of GDP data for the first quarter of FY21. But what exactly is stagflation? What are the main causes and why is it so dangerous? What is stagflation? Stagflation was first recognized during the 1970s when many developed economies experienced rapid inflation and high unemployment as a result of an oil shock. Stagflation is a period of rising inflation along with falling output and rising unemployment. As a result, real incomes fall as wages struggle to keep up with rising prices. It can also be defined as a period of inflation in addition to a decline in the gross domestic product (GDP).  The term stagflation , a portmanteau of stagnation and inflation , was first used during a period of inflation and unemployment in the United Kingdom in the 1960s and 1970s. UK policymakers failed to recognise th

Economic crisis is a phase in an economic cycle in which an economy faces travails and difficulties for a long time. It could be a sharp drop in the economic state of the country, manifested in a significant fall off in production; a violation of existing production relations; bankruptcy of enterprises; and/or rising unemployment and inflation. The result of this could be a decline in the living standards of the population and a sharp decrease in the real gross national product. Concept of economic crisis first set foot in the social sciences literature in 1960’s, defined as ‘ a period of difficulty, dismay or an emergency in the life of a country, a society or a corporation, or in relations of several countries. ’ Here’s an insight into the economic crisis faced by some nations: Zimbabwe The most neoteric example of hyperinflation, wherein prices change so hastily that every day the prices rise exponentially and money keeps on depreciating, virtually overnight or even in the

  Born – 23 rd August 1915 Affiliation – London School of Economics, University of Manchester, Princeton University. Nobel prize – Prize in Economic Sciences (1979) Contributions – Lewis Model, or dual sector model in underdeveloped and developing economies. “I never meant to be an economist. My father wanted me to be a lawyer but he died when I was seven; he had no vote at the appropriate time. I did not want to be a doctor either, nor a teacher. That put me in a hole, since law, medicine, preaching and teaching were the only professions open to blacks in my day. I wanted to be an engineer, but neither the colonial government nor the sugar plantations would hire a black engineer.” -         Arthur Lewis Sir Arthur Lewis, a pioneer of development economics and one of the influential Nobel laureates, also known as the father of development economics was born on January 23 rd 1915 to George and Ida Lewis who were both school teachers and had immigrated from Antigua. A