Sudip Bandyopadhyay’s Blog

In  her recent acclaimed book Dead Aid, Dambisa Moyo describes the state of postwar development policy in Africa today and unflinchingly confronts one of the greatest myths of our time: that billions of dollars in aid sent from wealthy countries to developing African nations has helped to reduce poverty and increase growth.  In fact, poverty [...]

Robert Shiller & his co-author George Akerlof, in  their recent book Animal Spirits- How Human Psychology Drives the Economy and Why it Matters for Global Capitalism,  argues that our own psychology and emotions, such as envy and resentment, drive house prices, debt levels and share values.
In the book, they  also argue: “What had the people [...]

Alan Greenspan in his book The Age of Turbulence commented that ‘Fear is an automatic response in all of us to threats to our deepest inbred propensities.  It is also the basis of many of our economic responses.  It is difficult for investors to imagine when markets veer from rational to irrational, from euphoria to [...]

That people respond rationally to incentives, and that market prices incorporate information about the world, are not terrible assumptions.  But they are not universal truths either.  Much of what creates profit opportunities and causes instability in the global economy results from the failure of these assumptions.  Herd behaviour, asset mispricing and grossly imperfect information have [...]