Daniel Gros shreds the myth around so called Greece recovery. Interestingly, the same lessons apply to India too..
He says despite the easing of crisis in Europe and Greece, the exports of Greece have declined:
In a recent voxeu post, Clara Capelli and Gianni Vaggi suggest another new measure - Gross National Disposable Income. This accounts for remittances in the GNP..
Traditionally, the Gross Domestic Product is the most widely accepted indicator of an economy’s size and performance, although in the last decades many contributions have suggested to adopt alternative tools to measure people’s wellbeing (see Stiglitz, Sen, and Fitoussi 2008).
The Gross National Income (GNI) is largely considered a better indicator to account for the income available to the dwellers of a country because it captures the incomes related to the mobility of factors of production (wages earned by cross-border workers, repatriated profits and dividends, etc.), the so-called Net Primary Incomes (NPI), in the Systems of National Accounts (see UN 2008 and IMF 2009).
However, GNI does not include unilateral transfers such as foreign aid and, most importantly, remittances: the so called Net Secondary Incomes (NSI). GNI accounts for the income of cross-border workers – the so called compensation of employees – but not for the money sent home by those who live and work abroad for more than one year, which are by far the largest share of remittances. Remittances have increased by approximately seven times between 1990 and 2010 (see the World Bank database); they now represent one of the largest types of monetary inflows for many developing countries and in some developing countries they can be as high as 20% of GDP.
Unilateral transfers are recorded by a third indicator, the Gross National Disposable Income (GNDI), which includes both primary and secondary distribution of income. GNDI provides a much better indicator than the GNI of the living standard of the people of a country and in many cases it should substitute for the latter measure.
The differences are huge. They rank the countries based on both absolute (table 10 and relative GNDI (table 2).
The authors also point out the places where GNDI would be more useful as a measure..
One hopes this news is not true. But if it is, then one does not know what to say..
RBI-Fin Min nexus is doing dangerous things and all secretly. One does not know what is going on. After plundering the state PSUs for meeting the fiscal deficit and using all kinds of financial engineering, we have another one. All this while RBI was worried over quality of fiscal consolidation, but it does not matter anymore. RBI simply might inform you towards the end of the deal on this.
FM just said the new bank licences (we still use the word licence) will go on as poll conduct does not apply to RBI. However, another news item suggests that some key policy changes are now going to be on hold. Only the next government can work on these decisions..
One does not know why such favorable treatment is meted to RBI decisions.
Well the biggest circus/tamasha (whatever you may call it) is about to begin. As ECI announced dates for Elections-2014, we are going to have loads of action for next two months..
Interestingly, just y’day there was this interesting post in voxeu on voting and psychology behind it. The authors conduct the experiment in just one region (Illinois) and one time (2010 Congressional election) so there are limitations:
The movie Minority Report was stirring and truly shock and awe variety. That it came more than a decade ago was even more amazing.
Prof. Mikolaj Jan Piskorski of Harvard Business School takes a peek at Facebook’s future. He says if Facebook gets things right it could take us very close to the world shown in Minority Report.
Narcissism means to be self obsessed and apparently there is research going on this topic. The research has shifted from narcissistic executives who take higher risks in order to glorify themselves. Now the research has shifted to MBA students too.
Paatrick Clark at BW reports:
IMF’s new Asia head Changyong Rhee has this nice short interview. He was earlier with ADB..
He sees IMF’s role changing to a family doctor who is by the side with the member whenever in need. The econs fascination to connect the profession with medicine continues after the famous Keynes comparison with the dentist:
There are interesting battles happening in the digital space with respect to cricket coverage. Earlier we could just sit and log into any of the websites and just follow the live coverage ball by ball without bothering to be disturbed by TV. And cricinfo.com team written commentary was as good as any.
All this has changed recently in the recently held India-NZ 2014 series. Sony was broadcasting the series but the websites were not allowed to do a live coverage. There was a delay on the website just to thwart competition from the websites. This case has excellent lessons on finance, microeconomics and law.
Gouri Shah of Mint covered the issue:
The children are often told in India (atleast) to practice as much as possible before exams. It helps one understand the subject and also the approach to exams. This is especially the case in math oriented subjects where practice is the key as steps are quickly forgotten and then there are mistakes. The entire ancillary education industry has mushroomed in India based on this logic. There are coaching classes for all things under the sun where they prepare you for “the exam” taking many retakes..
There is this paper by four econs which look at this learning experiment in Turkey. They find allowng students to retake exams leads to better learning:
The taper talk and its impact on emerging markets will be a research interest for many years to come.
Eichengreen and Gupta had looked at the event and said EMES that were hit the hardest were Those that …had relatively large and liquid financial markets, and had allowed large rises in their currency values and their trade deficits.
Fernanda Nechio of St Louis Fed also looks at the issue and has a different reason. Countries that had higher twin deficits were the ones that suffered the most:
The tide has turned and how. After decades of lecturing the developing world, time for developed world to get some advice.
Anusha Chari and Peter Blair Henry point to the importance of discipline for advanced economic policy guys. They should learn these lessons from the developing world:
From 1980 to 1992, emerging and developing countries grew by 3.4 percent per year. Their annual rate of growth increased to 5.4 percent between 1993 and 2012. No such increase occurred for advanced nations, whose average growth from 1980-2012 was roughly constant (excluding the impact of the 2008-09 Recession). Developing nations turned themselves around by embracing discipline—sustained commitment to a pragmatic and flexible growth strategy. Three illustrations of discipline through the lens of trade, fiscal, and debt reforms in the developing world offer relevant, practical lessons for recovery in advanced economies and continued catch-up growth in developing nations.
A really nice article by Stefan Szymanski Professor of Sport Management at the University of Michigan.
He explains how this origins of European Soccer club culture came about and how it has changed over the years from an economics lens. There is a bit of everything in the article – history, competition, regulation, deregulation, labor markets, labor mobility etc etc.
Happy Shivratri to ME viewers..
I have been wanting to write this post for a while but kept missing it. Today is perhaps the right time given the day. One usually goes to the temple on this day and the experience strikes you. These are just random thoughts and comments/suggestions welcome.