Vipin P. Veetil

Bio: Vipin P. Veetil is an academic researcher from Indian Institute of Technology Madras. The author has contributed to research in topics: Government & Voucher. The author has an hindex of 7, co-authored 46 publications receiving 230 citations. Previous affiliations of Vipin P. Veetil include Nihon University & Paris-Sorbonne University.

The Pausing Theory of Unemployment

Abstract: This paper develops a theory of business cycle unemployment based on the idea that the economy may temporarily pause in response to heightened uncertainty. The pausing of actions in some quarters of the economy eases the problem of decision-making in other quarters, thereby leading the way to recovery. Both the heightening of uncertainty and the pausing-phenomena emerge from the interaction between firms with inter-related plans in a high-dimensional system. Unemployment therefore is a systemic- emergent phenomena and occurs without the imposition of sticky- wages or appropriability problems at the micro level.

The pausing view of unemployment

Abstract: This paper develops a theory of business cycle unemployment based on the idea that the economy may temporarily pause in response to heightened uncertainty. The pausing of actions in some quarters of the economy eases decision-making in other quarters, thereby leading the way to recovery. Both the heightening of uncertainty and the ‘pausing phenomena’ emerge from the interaction between firms with inter-related plans in a high-dimensional system. Unemployment therefore is an emergent phenomena and occurs without the imposition of sticky wages or appropriability problems at the micro level.

The Complexity of Coordination

Abstract: The traditional mechanism of finding Nash equilibria presumes that economic actors are capable of performing computations which even computers would take far too long to perform. A decentralized and parallel process of interactions between simple economic actors is presented as a more plausible micro-foundation of the concept of Nash equilibria. It is found that agent-interactions on a scale-free network converge to an equilibrium within reasonable time, however no convergence is found on a small-world network, a ring and a random graph. The structure of the relations between economic actors matters. NP computational complexity of Nash equilibria does not diminish its empirical relevance.

Use of Knowledge in the Market and the Firm

Abstract: This paper develops an explanation for why some economic activities are organized through markets and others through firms. A basic economic problem is how to coordinate the plans of individuals in a system where information is widely dispersed. In the market, coordination happens through a process of decentralized interactions. In the firm, an entrepreneur centralizes information and makes plans to coordinate activities. Using the market mechanism entails the cost of finding potential exchange partners and agreeing on terms of trade. The cost of using the firm mechanism is that the plans made by the entrepreneur will be only as good as the quality of information that can be centralized. Information that changes frequently is difficult to centralize. So is information that is not easy to communicate. The relative cost of two mechanisms depends on the nature of information. The organization of an economy into markets and firms of different sizes may reflect the underlying information problems.

Distributed knowledge and the organization of economic activity

Abstract: This paper develops a simple simulation model to study the relation between the nature of knowledge and the architecture of economic systems. The market and the firm are different mechanisms for coordinating economic activity in a system where knowledge is widely dispersed. While the market solves coordination problems by decentralizing decision-making, the firm solves coordination problems by centralizing knowledge. The market incurs the cost of finding potential exchange partners and agreeing on terms of trade, while the firm incurs the cost of centralizing dispersed knowledge. The market therefore has an advantage over the firm in coordinating activities in which knowledge is difficult to centralize. The nature of knowledge involved in an economic activity influences not only the choice of the institution through which it is coordinated but also the internal structure of the institution. More specifically, the more hierarchical the firm, the better it is at using changing knowledge, but the worse it is at using knowledge which is difficult to transfer from one individual to another. Therefore, the number of layers in the hierarchy of the firm is influenced by the rate at which knowledge changes relative to the difficulty associated with communicating it.