Archive for January 1st, 2014

Keeping New Year’s resolutions…Some Behavioral insights..

January 1, 2014

The usually brilliant Cass Sunstein shares insights from recent research on human behavior (predictably irrational).

He says new year resolutions are like redemption coupons which people fail to redeem despite the apparent monetary benefits:

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Should we specialise or diversify? Questioning the comparative advantage theory..

January 1, 2014

Happy New Year to all once again. Hope you had a great time last night. Fireworks in some places was as always brilliant. But I particularly liked the lightning in Shanghai which was different and looked really cool.

So how should ME start the new year? By pointing to an article that questions one of the oldest theories in economics – comparative advantage. It is by Prof Ricardo Hausmann of Harvard who has been writing some fascinating and food for thought stuff recently.

Comp Adv. theory says countries gain from trade by specialising in the good/service in which they hold comparative adv. Prof Hausmann says much talk about importance of specialisation is a myth. The more diversified an economy the richer it is.

He begins saying it is really hard to defy an idea that looks really good on paper:

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