Archive for May 29th, 2017

Economics and the human instinct for storytelling

May 29, 2017

Robert Shiller has a nice essay on the topic:

I’m starting now, with my more recent work, to think that we have to look at the humanities as well. There is something difficult to formalize about human beings, but something that we nonetheless have to understand, and I think one way to do that is with an approach that I’m calling “narrative economics”: taking economics and adding the study of the narratives that people transmit. 

The human species, everywhere you go, is engaged in conversation. We are wired for it: the human brain is built around narratives. We call ourselves Homo sapiens, but that may be something of a misnomer—sapiens means wise. The evolutionary biologist Stephen Jay Gould said we should be called Homo narrator. Your mind is really built for narratives, and especially narratives about other humans. That is why advertisers tend to focus not on a product itself, but rather on somebody doing some human action related to the product.

Narratives are contagious: they spread from one person to another. Some narratives disappear quickly; others can last a long time. I think of a narrative as a gem, something that you heard somewhere, and you think, I’ll remember that next time I’m in a conversation. I’ll use that. I’ll say it. I’ll try to present it right because I want it to have the effect that it had on me. That is a narrative. Narrative can, in the parlance of the internet, go viral. 


Why does money depend on trust?

May 29, 2017

Nice primer from Bank of England. Trust is all there is to money..

Norges Bank develops a video on new banknotes..

May 29, 2017

Interesting video from Norway Central Bank celebrating its new 200 kroner banknote which has its favorite fish- cod – on the note.


There is some explanation here:


Here is Copernicus doing monetary economics!

May 29, 2017

Brilliant JP Koning has a superb tweet:

There is more here..

Well, there was a bank named ‘Sarkari Dukan’ (Government shop in English) in State of Udaipur!

May 29, 2017

I was reading this book by Dr Harish Sharma (delighted to see a link on the net) which was actually his PhD thesis The thesis looks at evolution of banking focusing on Rajasthan State. It has many interesting aspects of Indian banking, which we sadly neither know nothing about nor we care.

He starts the book by quoting from this interesting text by William Robertson.

it is a cruel mortification, in searching for what is instructive in the history of past times, to find that the exploits of conquerors who have desolated the earth, and the freaks of tyrants who have rendered nations unhappy, are recorded with minute and often disgusting accuracy, while the discovery of useful arts and the progress of the most beneficial branches of commerce, are passed over in silence, and suffered to sink into oblivion.

He says this applies so well to India’s origins and progress of banking. Well not just banking but all aspects of business and commerce. We just have let everything sink into oblivion. He is talking about a much earlier period on which resources are  really difficult to figure. We have let history slip of periods on which there is atleast some “written information”.

There are some attempts to undo this damage by the Penguin series. But unless all this is taught and debated in colleges, we can hardly make much progress.

Coming back to the book. It has amazing insights into progress of banking in state of Rajasthan. It was obviously many kingdoms back then and how they financed their operations and soon. The region was also home to Marwaris and Jains who obviously had a knack for maths which was used brilliantly in financing and industry later on. We know about Marwaris not as much about Jains.

He mentions how after 1857 revolt, the state of frequent wars in the region declined. This was a time for making some economic progress and the local some of the local kingdoms did realise this. Finance was seen as a major impediment in this progress as there was uneven development in the region. This led ruling princes to establish banks/financial institutions to aid agriculture and foster industry. Of course, none had any experience in banking which showed in eventual outcomes as very few could survive.

State of Udaipur was the first to establish a bank in the region in 1842, before the 1857 revolt. It set up a bank called Udaipur state bank which was more popularly called as ‘Sarkari Dukan’ (means Government shop in English)!


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