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Tejvan Pettinger Definition of adverse selection: Adverse selection occurs when buyers have better information than sellers, and this can distort the usual market process. It can lead to missing markets as firms do not find it profitable to sell a good. Adverse selection explained A company selling life insurance...

Definition of asymmetric information: This is a situation where there is imperfect knowledge. In particular, it occurs where one party has different information to another. A good example is when selling a car, the owner is likely to have full knowledge about its service history and...

C. P. Chandrasekhar The government has finally admitted that the Indian economy is on a steep downturn. For some time now, even the business community, which tends to shower all praise and disapprove any criticism of the reformist Modi dispensation, has expressed concern about deteriorating economic...

– Inferior, Normal, Luxury Tejvan Pettinge A list of different types of economic goods. Income elasticity of demand and types of goods Income elasticity of demand (YED) measures the responsiveness of demand to a change in income. Normal good A normal good means an increase in income causes an increase in demand....

Sunanda Sen That the Indian economy is currently experiencing a slowdown  is more than evident, both with the deliberations in different private circles and with official statements signalling a series of remedial measures , mostly focussed on the ailing financial sector! However, as we point out, the...

Tejvan Pettinger The broken window fallacy states that if money is spent on repairing the damage, it is a mistake to think this represents an increase in economic output and economic welfare. If money is spent on repairing a broken window, the opportunity cost is that...

C. P. Chandrasekhar September 25, 2019 In another instance of lack of clarity in economic decision making, the NDA government seems to be drifting into signing on to the Regional Comprehensive Economic Partnership (RCEP) Agreement potentially involving 16 Asia-Pacific partners. Under discussion for 7 years now, the...

Prabhat Patnaik The reduction in the corporate tax rate by the BJP government, which would entail a transfer of Rs.1.45 lakh crores from the public exchequer to the corporate sector, has been generally seen to be insufficient for overcoming the slowdown in the Indian economy. This...