http://dspace.uiu.ac.bd/handle/52243/13 Sun, 12 Apr 2026 21:08:44 GMT 2026-04-12T21:08:44Z http://dspace.uiu.ac.bd/handle/52243/70 The tale on innovation and growth Rahman, Mir Obaidur Whenever we see the word innovation, we instantly recall Joseph Schumpeter who popularized the word in economics through his business cycle theory. Joseph Schumpeter explained the fluctuations of economic output through the concept of innovation which was a pet word in those days and also today as an important instrument to spur growth. Economic activities over time actually trace like a serpent; the amplitude is neither even or nor symmetric. A constant linear growth is a rare occurrence though we have a glimpse when we observe the growth pattern of China from 1978 to 2012. Schumpeter’s four-phase cycle; prosperity, recession, depression and recovery manifests that innovations are discontinuous over time. An innovation embodies the discovery of a new process, product or services by the technocrats when the existing one is at the stage of obsolescence or dysfunctional. The entrepreneurs with business acumen who take risks are at the forefront to initiate innovation that yields extraordinary profit. These extraordinary profits attract a swarm of imitators and thus “display a flood of investment.” The expansion phase sets in. However, the boom ends at the climax because of the “lopsided, discontinuous by nature… the disharmony is inherent in the very modus operandi of the factors of progress.” The upswing starts when the more courageous entrepreneurs once again start to innovate. Download the PDF to read more Wed, 13 Dec 2017 00:00:00 GMT http://dspace.uiu.ac.bd/handle/52243/70 2017-12-13T00:00:00Z http://dspace.uiu.ac.bd/handle/52243/69 Rationality versus Irrationality Rahman, Mir Obaidur Any introductory textbook on economics always starts with the fundamental assumption of rationality. The rationality axiom guarantees that given scarce resources, a consumer always tries to maximise utility. The maximisation of utility however is a function of manifold environments. The certainty or the uncertainty issue often brings the decision making process fuzzy as pointed out by Friedrich von Hayek. He asserts that the achievements or a decision is often poorly understood when configured by a different perspective on the role of socioeconomic institutions, behavioural and cultural norms encapsulated in the “knowledge, the idiosyncratic, dispersed bits of understanding of “circumstances of time and place.” This deviation in the decision making process due to uncertainty has changed the landscape of the conventional economics and given birth to new frontier of behavioural economics or empirical economics.When you look into the behavioural finance, you will observe a set of paradoxes and thus need to goad to ascertain the delicacy in the paradoxes and get a solution that satisfies the irrationality in this decision making process. The most important paradoxes are “St. Petersburg Paradox. Mean -Variance Paradox in the selection of portfolio of assets and Maurice Allais Paradox. Now the financial economics has two branches; Classical and Behavioural. Behavioural finance is more related to situation that deals with human psychology and thus often lukewarm in relation to its first cousin, classical counterpart. Donwload the PDF to read more Wed, 05 Apr 2017 00:00:00 GMT http://dspace.uiu.ac.bd/handle/52243/69 2017-04-05T00:00:00Z http://dspace.uiu.ac.bd/handle/52243/68 Philosophy of Abenomics Rahman, Mir Obaidur It is often customary to attach the name of a president/prime minister who pursues an innovative set of policies that draws a roadmap in economic growth in the near future from the current poor state of the economy. Reganomics or supply side economics of Ronald Regan during 1981-1989 and Clintonomics during 1993-2001 served as classic examples. The basic tenets of Reganomics were widespread tax cuts, decreased social spending and the deregulation of domestic markets. The premise of his policy was the traditional concept of “Trickle Down” theory that a reduction of corporate tax is the best way to stimulate growth; low corporate tax rate would have dual effect; corporate savings would be translated into investment and thus more employment and growth. President Clinton advocated for more humane approach with elements of modernizing the federal government, making it more entrepreneurial and distributing more authority to state and local governments. Download the PDF to read more... Fri, 17 Mar 2017 00:00:00 GMT http://dspace.uiu.ac.bd/handle/52243/68 2017-03-17T00:00:00Z http://dspace.uiu.ac.bd/handle/52243/67 Aftermath of Fed Rate Hike Rahman, Mir Obaidur The dawn is now in the world. At last, the Fed has raised the interest rate to prod the economy and to pacify the President! Milton Friedman, the pioneering monetarist and a Nobel Laureate from the University of Chicago once told that if you print money, it is a policy. If you do not print money, it is also a policy. To make an analogy, so if you raise the interest rate it is a policy and if you do not raise the interest rate, it is also a policy. The most important podium to look for in this policy revision is the context; the environment and the economic fundamentals on which you change your decision or strict to static situation. It is not a relevant issue or question whether Janet Yellen who was appointed by Barack Obama and whose next tenure is in the regime of Donald Trump should flip on the movement of wind or should her decision be based on the sound working principle of the Federal Open Market Committee [FOMC] on interest rate change. There are many historical anecdotes on the issue of policy changes that slide to favor a party or group on the event of an election campaign but the world seldom see changes on any of this fundamental issues in the developed world. Even in many countries of the developing world, even the changes are molded through a fair and impartial institutional set up; the integrity of that institution was never put on trial. You may also consider the static state of Alan Greenspan on lowering the interest rate when the economy was in recession in late eighties despite the repeated request of the President H. W. Bush who appointed Alan Greenspan but he disappointed the President in his second term in office. Wed, 29 Mar 2017 00:00:00 GMT http://dspace.uiu.ac.bd/handle/52243/67 2017-03-29T00:00:00Z