Archive for August 5th, 2013

Did Keynes figure his ditch digging and filling theory in India?

August 5, 2013

Having stayed much of my life in North and West part of the country, the shift to Southern zone has been interesting. Many (perceived) facts have become myths and new perspectives have been gained.

There is one thing common which I have  seen all across – fascination for digging, filling and re-digging roads and public spaces. So much so, I wonder whether Keynes learnt his digging ditches theory from India while on his stint at Indian sub-continent? I know it is a really random and weird thought but heckman it is no joke. There is a strong possibility that Brits did not allow as much digging as we as a society allow these days.  In that case, one needs to really understand how and where did this start and spread all over the country.

It is not just government officials which keep looking for excuses to dig and fill, the public does it as well without worrying about the law etc. So a new road is laid but my pipeline is creating problems, No worries I will just dig the road and make my pipeline work. TO hell with the road. People have to ride on it just like so many other digged roads. If the work cannot be complete in a day’s time, no worries as the rest of the road/public space could be used for managing the construction work. It has become an absolute nuisance to see public nonchalance and lack of rules in this space. It leads to further issues of hygiene and disease.

Though, one can doubt whether the ditch-digging and filling idea create employment… On that front, India should clearly have had a more job-full growth and not really a jobless growth as proclaimed by economists.  I mean we are just so involved in this economic activity (if I may call it). Or may be whatever jobs have been created this digging and filling theory plays a large role.

(There is another random linkage to Keynes’ fiscal multiplier theory –  Umaid Bhawan)..

Economics for Parrots..

August 5, 2013

Came across this old column (written in Sep-10) by Brad Delong.

Found the opening lines really amusing:

It is said that the early nineteenth-century British economist J.R. McCulloch originated the old joke that the only training a parrot needs to be a passable political economist is one phrase: “supply and demand, supply and demand.”

Then in typical Delong style he points how econs are doing a worse job than McCulloch parrots. This was the time when few econs claimed that rise in unemp was structural and needed a structural solution. However, Delong (and Krugman) always argued it was cyclical and basically because demand had slipped sharply post the recession. It was mainly because of supply and demand, supply and demand…:-)

Learning from double-digit growth experiences

August 5, 2013

A paper which tries to balance the B-S debate.

It is by Eric D. Werker of HBS. He compares double digit growth experiences with 6-7% ones and shows latter is actually better on many counts. This research is with respect to Liberian economy which is expected to grow in double digits (well India is not the only one as we are made to believe). So should it aspire to grow in double digits? What is the experience of other double-digit growers?


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