Archive for July, 2012
In the lecture he pointed that inequality has been rising for two decades (way back then). This was common across transatlantic economies earlier but was becoming common across other econs as well. However Prof. Atkinson disagreed with the notion that this was inevitable. Policy could lower the inequality. Of course none of this was followed..
William Easterly got the 2008 award for his superb book The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. His lecture on the occasion is a decent read.
As we know, Easterly is a huge critique of top down approach of development. In this one has all these development experts who think they know what is in the interest of the poor. Easterly instead vouches for bottom-up approach where people decide what to do. This is also similar to what Hayek also said:
A nice paper from Sripad Motiram and Ashish Singh of IGIDR.
Economists call this issue as Intergenerational Occupational Mobility and is really important to understand the inequality issue. Hopefully over a period of time we can expand this research question to Do most children (both sons and daughters) take up their parents’ (mother and father) and occupations? It is too gender-specific issue as of now.
The broad idea is as an economy develops, people from lower skill/earnings group should be moving to higher skill earning group. This is especially true of children of low earning strata. That in turn leads to development and better lives.
Guha reviews two books on India history- Recovering Liberties: Indian Thought in the Age of Liberalism and Empire
By C. A. Bayly and Democracy and Its Institutions By André Béteille.
The start to the review is amazing:
The research in a way is quite similar to Daniel Kahneman’s research. But the stress on unconscious mind is quite a read.
Martha Lagace: What do you mean by unconscious thought?
RBI recently held its Sixth Annual Stats Conference. This is a really brave annual conference given with huge issues with stats reporting in India. This year’s theme was central banks and data gaps.
RBI Gov. Subbarao gave some great insights in the speech on Indian economy and its stats system. There was some great humor on himself as well. On inflation measurement he says:
A very controversial and strongly worded article by Luigi Zingales, who is a B-school professor himself. He is a prof. at Booth School at Chicago and writes on the need to have ethics in B-school training.
He says these recent scams like Insider trading, LIBOR fixing etc come from B-School and Econ training.
India fiscal deficit at (8.9% of GDP) might just better than Japan (9.9% of GDP) this year. But in 2013, India might top the list with FD at 8.8% of GDP vs. Japan’s 8.6% of GDP.
On India’s Fiscal misfortunes, IMF says:
I posted a paper from NIPFP econs on the topic earlier. Here is another one this time from IGIDR econs - Arun Kaushik and Rupayan Pal. Both point to the importance of politics in allocating development expenditure. However, the results are just opposite.
The first one looks at whether fragmented or single party govts spend more (it is fragmented which spend more). This one looks at the role of political stronghold and does not think fragmentation has a major role:
Manhattan Institute organises annual Hayek Lecture.
The 2012 winner was John Taylor. Here is his speech on the occasion titled as Road to recovery (based on Hayek’s famed book – road to serfdom).
Taylor connects his rule based policies to Hayek’s freedomm ideas which also relied on consistent rules:
The four laws are:
1. The laws of supply and demand do not apply. (In terms of wages of financial sector. More the applicants for i-bank etc jobs, higher are the salaries!!)
2. Success is down to my genius; failure is caused by someone else. (Something which Prof. Kahneman put up nicely)
3. What is lucky for an individual trader may be unlucky for the bank as a whole (he may have taken higher risks to boost his bonus which is revealed later)
4. Resigning can be a retirement plan. (lol)
More to come…
The vacuum cleaner, the freezer, the bag of flour: the hiding of money..
Salvatore Vinci’s Greek friends are quite imaginative. ”I was really surprised that everyone had such hiding places,” says the photographer. For months, accusing the Greek banks need to resolve the country’s citizens to keep their balances and cash. ”I have friends who work in the bank, telling me that every day 80 to 100 million euros will be lifted,” said Vinci. He has photographed the €-hiding his Greek friends.We show his pictures.
See the link for more details..
NY Mayor Bloomberg announced a housing program to build micro-apartments in NY City. These apartments would be of 275 sq. ft (hopefully all carpet feet area and mainly for households having 1-2 persons (in Mumbai whole families live in this kind of area).
Howard Husock of Manhattan Institute writes this terrific article on this policy move: