Nudge Theory and Behavioral Economics

What is ‘nudge theory’ and why should we care?

The concept is a relatively subtle policy shift that encourages people to make decisions that are in their broad self-interest.

It’s not about penalising people financially if they don’t act in certain way.It’s about making it easier for them to make a certain decision.

“By knowing how people think, we can make it easier for them to choose what is best for them, their families and society,” wrote Richard Thaler and Cass Sunstein in their book Nudge, which was published in 2008.

For example?

Economic Growth and economic development

A country's economic health can usually be measured by looking at that country's economic growth and development.

A country's general economic health can be measured by looking at that country's economic growth and development. Let's take a separate look at what indicators comprise economic growth versus economic development. Economic growth is an important macro-economic objective because it enables increased living standards and helps create new jobs.

 Let's first examine economic growth. A country's economic growth is usually indicated by an increase in that country's gross domestic product, or GDP. Generally speaking, gross domestic product is an economic model that reflects the value of a country's output. In other words, a country's GDP is the total monetary value of the goods and services produced by that country over a specific period of time.

Jim Yong Kim Success Story: World Bank President

Jim Yong Kim is a major success story; he came from humble beginnings to become the president of the World Bank and has achieved many other major personal accomplishments.

Financial Crisis Asia 1997

 The East Asian crisis was fundamentally a currency crisis. A lot of companies in East Asia, especially financial institutions, had borrowed significant amounts of money from foreign banks denominated in foreign currency. When Thailand's currency, the baht, was devalued significantly, (Thailand's central bank had pegged the value of its currency to the US dollar, and it did not have enough reserves to support its value any longer) this precipitated a contagion where other currencies in the area started dramatically falling in value. The decrease in the value of these currencies made the loans borrowed by these financial institutions from foreign banks unserviceable because these loans were denominated in foreign currency and were thus much more expensive. This had a wide range of effects, perhaps the most devastating one being the collapse of the equities market; the stock markets in the East Asia region had lost as much as 2/3 of their value. The economic implications of this are profound. I'd try to give a more comprehensive search on the web, I'm not very familiar with this crisis

Greece Financial & Debt Crisis: Details, Causes & Lessons

Greece is the birthplace of Western civilization, modern democracy, the Olympic Games, new ideas in science / art / philosophy and also the birthplace of Alexander the Great. About 2,500 years ago, the Greeks created a way of life that other people admired and copied.

Financial Crisis 2008 -causes and effect

 I am going to try to answer this question as simply as possible... so basically a financial crisis is caused when money is not circulated well in an economy (or country) and when this happens everywhere in the world, it is called 'global financial crisis'. 

Exchange rate calculation and LIBOR effects

Supply and demand will determine the price of foreign currency.

Base currency is the fixed currency. Either in direct or indirect

There are 3 types of rates 1. Spot/ cash rate 2. Cross rate 3. Forward rate

Macroeconomics, Macroeconomic analysis and Balance of payment

Macroeconomics is the study of the behavior of the economy as a whole. This is different from microeconomics, which concentrates more on individuals and how they make economic decisions. Needless to say, macroeconomy is very complicated and there are many factors that influence it. These factors are analyzed with various economic indicators that tell us about the overall health of the economy.

GDP, Business cycle, Demand supply, Money Supply, elasticity and monetary and fiscal policy etc

What Is the GDP Growth Rate?

The GDP growth rate measures how fast the economy is growing. It does this by comparing one quarter of the country's economic output  (Gross Domestic Product) to the last.

The GDP growth rate is driven by the four components of GDP.

Strategic Leadership

One of the key strategic roles of both general and functional managers is to use all their knowledge, energy, and enthusiasm to provide strategic leadership for their subordinates and develop a high-performing organization. Several authors have identified a few key characteristics of good strategic leaders that lead to high performance: (1) vision, eloquence, and consistency; (2) articulation of the business model; (3) commitment; (4) being well informed; (5) willingness to delegate and empower; (6) astute use of power; and (7) emotional intelligence.