Subject: Re: A interesting story
From: Ezechiel Copic, (Dismal Sciences)
Date: Wed Jan 13, 2:44 pm
Message
Mr. Lim The underlying principle of the story you have submitted is similar to the concept of welfare economics. The recent Nobel Prize winner in Economics, Mr. Amartya Sen, discusses such issue in depth. You may read about Mr. Sen and his theory at the following URL: dismal.com
I hope that this will be of some help. If you have any other questions, comments, etc. please feel free to contact us. Sincerely, Ezechiel
Michael Lim wrote: > Hello.I am Michael Lim.The following story was based on > China historical account,I hoped you would enjoyed it,it > following: > During the Song Dynasty when a famine broke out.The > price of rice rocketed up,resulting in many people starving > to death.Notices were put up in every provinces and > districts warning rice merchants against increasing price > further.However,one ration official representing two > provinces said "Put up new notices,lift the control over > the price,the merchant were freed to impose their price." > Rice merchant everywhere rushed to sell their > stocks in these provinces only and prices plummeted > instead.From the story,what are the insight and concept > behind it.
Thank you for the answer.
And the Nobel Prize goes to:
Archives <archive/archives.asp>
And the Nobel Prize Goes To...
Analysis by Ryan Cardwell </thoughts/archive/bios.asp?Author=Ryan+Cardwell>
Written October 14, 1998
The 1998 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel was awarded to Amartya Sen, a professor at Trinity College, Cambridge, U.K. Sen was born in 1933 in Bengal, India, and has been a perennial Nobel candidate for many years. Sen was awarded the prize for a body of work on welfare economics and social choice theory. His applied research focused on development economics, primarily famines and income inequality in developing countries. Although much of Sen's research is theoretical, he has received a great deal of attention for his applied work on poverty and famine. Indeed, the Nobel citation read that Sen "has restored an ethical dimension to the discussion of vital economic problems," something many current students in economics often say is lacking in their studies. Sen's best known work on the subject is 1981's Poverty and Famines: An Essay on Entitlement and Deprivation. This book asserts that food shortages were not the chief causes of famines in India, Bangladesh and Saharan since 1940. This conclusion is based on the observations that food supply did not drop significantly in famine years and that many famine-stricken nations exported food during these periods. Rather, famines are due to a combination of other, observable, occurrences. For example, floods in Bangladesh resulted in rising food prices and diminished employment opportunities. These two occurrences lowered the purchasing power of certain workers, resulting in an unequal distribution of starvation. Those workers not affected by the flooding (primarily non-agricultural workers) were disproportionately unaffected by the famine. Sen's theoretical work focused on the underlying principles of welfare economics and social choice. Much of his research built on Kenneth Arrow's (Nobel laureate, 1972) impossibility theorem, which states that no social welfare function can satisfy five, seemingly reasonable, axioms without resulting in a dictatorial economy, wherein one agent's preferences supercede all others'. Sen's largest contribution to the understanding of Arrow's theorem is the introduction of interpersonal comparisons of utility, or welfare. If these comparisons can be made, the impossibility theorem is vulnerable. (cont)
dismal.com
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