Monday, May 07, 2007

The Kumbanadan model of economics.

A popular question on campus during recruitment season used to be - " Would you rather be a big fish in a small pond or a small fish in a big pond and why?" I have never been asked this question but I did have a prepared answer just in case. My answer went something like - "I'd rather not be a fish."

Economists have a similar trick question - "Would you rather be a rich person in a poor country or a poor person in a rich country?" Unlike the previous question however, this one has a definite answer based on hard data. To see if your answer is correct check out the explanation on Harvard economist Dani Rodrik's blog. ( Hint: Visit Kumbanad.)

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