The government-RBI game

Governor Shaktikanta Das' biggest challenge is to convert the game from a non-cooperative one, which his two predecessors had made it, to a cooperative one

In game theory, a zero-sum game is one where what is won is exactly equal to what is lost. If you examine the current debate on the government and the Reserve Bank of India (RBI) — or for that matter any debate on governments and central banks anywhere in the world — you will find that this is how it is discussed. What one side gains is exactly equal to what the other side loses.

But this is a bad way of discussing the issues, especially in the Indian context where we can have both sides losing or both sides gaining.