Archive for October 15th, 2015

Du Runsheng, world’s most influential yet ignored economist?

October 15, 2015

Not even heard of the name. Apparently he was the main economic thought behind China’s 1978 rural transformation.

Here is a story..

Last week, Du Runsheng passed away at the ripe old age of 102. The death of the “father of rural reform” was widely covered in China and Hong Kong, as Du’s proteges include such Chinese economic luminaries as Zhou Qiren and Justin Yifu Lin, not to mention Wang Qishan, who is now one of the seven most powerful men in China. But I have yet to see a proper obituary of Du in the foreign press, which is a real pity. You could make a case that Du was one of the most influential economists to have ever lived.

He was one of the primary authors of the rural reform policies China adopted in the early 1980s, which reversed agricultural collectivization and returned control of farmland to individual farm households. It is no exaggeration to say that as a result, hundreds of millions of people were able to escape poverty. If you measure influence by the sheer number of lives affected, then it seems Du would have to rank pretty high.

Shocking to  see complete ignorance..

Restricting capital account is the new thing..

October 15, 2015

You can explain much of economics thinking in terms of fashion waves. They just keep coming back and each time the new fashion designers show it as a new look of the town.

This crisis has obviously questioned pre-crisis fashions. Instead we have the post-crisis fashions which is just old wine in new packaging (which isn’t attractive). Capital account convertibility is one such fashion. It was in vogue before crisis and any talk against it was seen as anti-markets. anti -liberal and so on. Post-crisis, thinking has changed and even likes of IMF suggesting capital controls can be used though it should be the last option. From not a choice at all to using it as a last choice is some change by itself.

AV Rajwade writes on the dilemma for emerging markets (he was a member of 1997 Capital Account Committee and 2006 one as well). More interestingly, group of IMF economists suggest Mundell-Fleming model needs to be retweaked to bring this reality. It is the Mundell-Fleming model which has been used by experts to push open their capital accounts.

Actually, much of recent problems around macro today is related to capital flows. People blame advanced country monetary policy over spillovers, search for yields, volatile currency/equity markets and so on. All this is due to rise in capital flows across the world. And capital runs in both the directions seamlessly. That was also the main idea also.

The same people once advocated opening capital accounts in emerging markets strongly. Instead of accepting that they need to rethink on their worldly wisdom, the blame has been pushed to advanced country central banks.

Keep going in circles. Whenever crisis recedes, am sure it will be back to opening capital account…

How monkeys became big business in Florida?

October 15, 2015

Felix Gillette of Bloomberg Businessweek has this piece which is both interesting and troubling.

Monkeys have become a key business for medical testing and research.

Each year, roughly 20,000 or so monkeys are flown from tropical regions worldwide into the U.S. Many wind up at stateside farms. Despite the relatively small number, the monkeys play a huge role in basic scientific and medical research, says Matthew Bailey, the executive vice president of the National Association for Biomedical Research. Before a new drug or vaccine can go on the market, the U.S. Food and Drug Administration requires safety testing using animals. The use of monkeys has been essential, says Bailey, in developing cures for everything from typhus to polio and is integral to the study of currently incurable diseases such as Alzheimer’s and AIDS. “My suggestion is that if you agree with the animal rights narrative, open up your medicine cabinet and throw out all your pills, including your child’s pain reliever,” he says. “Because without animals in preclinical research and testing, we wouldn’t have them.” Clients of monkey farms won’t describe what happens to the animals they purchase. Activists allege every dark scenario from death by Ebola virus exposure to experimental surgery.

The article is around the various conflicts one has to fight in such kinds of business..


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