Archive for April 28th, 2014

Reforming teaching of economics – a roadmap

April 28, 2014

Economists love to use to word reform for changing anything related to economics. But how about a reform to change the way economists teach the subject?

Post Crash Economics, is this forum/society floated by Manchester School to reform economics teaching. The guys at Manchester are taking forward the movement launched by French students in 1999 to reform economics., The movement despite its appeal and support could not make much headaway.  This have hotted up after the recent crisis which has led many to introspect over econ teaching.

PCE has released this really interesting roadmap for reforming economics. The broad idea is – teach history and make economics connect to the real world:


Do remittances and FII inflows lead to build-up of Dutch disease in Indian economy?

April 28, 2014

An interesting piece from AV Rajwade in recent EPW. It is quite a change in the views considering capital inflows which is amazing.

He says this continued reliance on remittances and FII inflows is actually leading to weakening of Indian industrial sector. This resembles the Dutch disease which hit the same economy in the past:


War of words over Gujarat’s growth model…

April 28, 2014

As world econs debate Piketty, Indian econs are debating the growth models of states (read Gujarat) given the huge elections at stake.

Well there are only a few economics issues on which one gets to read active and vociferous debates from Indian economists. I mean there must be many such debates (as there are huge ideology differences in economics) but one does not get to read them. And as always the source of such debate is EPW.

So here are the articles:

  • It all started from this EPW article on 12Apr-2014 by Maitreesh Ghatak of LSE and Sanchari Roy of University of Warwick, the UK. They analyse looking at whether growth accelerated in Gujarat during the Modi regime and their answer is that there is no evidence of growth accelerating under Modi regime.
  • This has led to slew of articles by other scholars to and to each Ghatak et al have replied.

Interesting stuff. Am still trying to follow the nuances of each of these responses and rejoinders. The authors question the evidence presented in all these papers which helps build on the debate.

If anything, atleast it has led to interesting discussion using econometric techniques etc to figure the eternal truth. So one can see the advantages and limitations of these techniques and understand how one looks at these things like structural breaks etc.


Are active and vibrant financial markets safe too?

April 28, 2014

Atlanta Fed hosted this annual conference on financial markets.

Came across this interesting paper (ppt here) by Prof. Joseph Stiglitz. In the usual Stiglitz spirit and appraoch, he crticises this whole rise of active and vibrant markets:


Measuring Misery around the World….(India ranks 21st in a list of 90)

April 28, 2014

Steve Hanke of Cato has this interesting article. I was not aware that there is something called misery index which measures economic and social costs of living in a country.

The index is also really simple: Inflation rate + unemp rate . It was developed by Arthur Okun and was further developed by Prof Robert Barro (added interest rate and subtracted per capita GDP growth to the two variables). There is this site which updates the index for US economy regularly (though only for Okun’s formula). It is interesting to note how the index has developed across the regimes of various US Presidents since 1948. Despite the mess US is in, the index is now as high in US (8.21) with most driven by unemployment. It was around 6-7 before the recent crisis.

Prof Hanke puts the list for 90 countries as well along with  the factor responsible for the misery. He uses Barro’s four factor model:


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