Archive for June 1st, 2017

Guest Post – India’s grade inflation crisis is actually a grade distortion crisis

June 1, 2017

Good friend Prabhat Singh sends me a post on an issue he thinks deeply about:  grade inflation. He says it is not inflation but distortion. Thanks Prabhat for the timely post on a very important matter yet just laughed off. These are the kind of social institutions which once distorted create trouble across the society and cannot even be rectified quickly.

Over to Prabhat..


Few are aware of the sheer fraud and illegality peddled in the name of board exams in India. This includes not just the usual suspects – UP and Bihar board – but even the nationally respected CBSE and ISC board. The 30 marks reserved for the practical exam is a mere formality to let the students pass. Worse, in the name of moderation, everyone who gets between 79 and 94 is allotted 95 marks. This isn’t speculation, but based on data analysis carried out by a friend and I, published below. Our analysis confirms that nearly board exams in India are statistically invalid. The article also contains interviews with insiders placed high up in the ICSE and CBSE boards, and bring out shocking truths about the inadequacies of the marking system.

Marks inflation is the direct result of competition among boards. Unfortunately, prestigious universities such as DU make no distinction between two boards and marks allotted by them are taken at face value, which provides boards with perverse incentives. For instance, a disproportionate share of students admitted to SRCC last year were from Tamil Nadu board. It’s for the same reason that BITS-Pilani and several other colleges shifted to their own exams instead of relying on board exam marks. It is also amusing to see the see-sawing in pass percentages of state boards, with change in state government. UP board’s pass percentage has swung between as low as 14 and as high as 80, depending on the government in power. Needless to say, there are forces far beyond merit of students and difficulty of exam paper at play.

It is a welcome sign that the issue of marks inflation has finally reached the higher judiciary. Although Delhi HC ruled against CBSE’s decision to abandon this system, hopefully this folly will be corrected soon and all boards will be brought to account. It is also critical that the court educate itself about the system of education of boards before reaching a hasty decision. Pending this major correction, the very future of our nation is in dire straits.

More here:

A Pretty Peso: Colombia showcases its rich culture on the newest member of its family of banknotes

June 1, 2017

On one hand, we are seeing governments pushing digital money and on the other we see Governments across the world issuing newer and fancier banknotes. It is partly to increase security and partly to keep the feeling of nationalism going. This blog has pointed to new banknotes/coins in New Zealand, Sweden, UK, NorwayFiji and  many more.

Nadya Saber points to Colombia’s new banknote series:

As Colombia progresses on a trajectory of healing and growth, the country has issued new banknotes that pay tribute to former presidents Carlos Lleras Restrepo and Alfonso López Michelsen, anthropologist Virginia Gutiérrez de Pineda, poet José Asunción Silva, painter Débora Arango, and national literary treasure García Márquez—influential Colombians who have shaped the country’s cultural, political, and scientific landscape. 

José Darío Uribe, former governor of the Central Bank of Colombia says, “the new family of banknotes responds to the needs of the economy, pays homage to outstanding personalities of the country, and exalts our biodiversity, turning it into the new image of our banknotes.”

It has a 50,000 Peso note with celebrated author Gabriel García Márquez on the bankote:

A 2016 nominee for the International Bank Note Society Banknote of the Year award, Colombia’s 50,000 peso note featuring García Márquez is a finalist among 18 revamped banknote contenders from around the globe. 

García Márquez’s legacy—bringing Latin America to life through the pages of his poignant prose and giving the world a glimpse of the Colombia he loved—shines through the violet undertones of the 50,000 peso note. And an excerpt of his Nobel Prize acceptance speech is also featured on the bill.  

It’s no surprise then that everyone is talking about the Gabo banknote—especially on social media. Run the search #Gabo and you are likely to find countless posts not only praising the author’s banknote, but also asking how to obtain one.  

Colombia’s new family of banknotes is cause for celebration—proving that the country is ready to cash in on its history to bank on the future.


Economics textbooks continue to ignore entrepreneurship….

June 1, 2017

Interesting paper by Dan Johansson and Arvid Malm.


Germany Is the silicon valley of political innovation

June 1, 2017

Interesting piece by Prof Tyler Cowen. Never thought Germany as an engine of political innovation:

One of the more significant quotations of last week came from President Donald Trump, when he reportedly described the Germans as “bad, very bad,” referring to their automobile exports. ….

Another take on Germany, articulated by many economists and technology observers, is that the country has quality manufacturing but hasn’t been very innovative in other sectors, and is thus a disappointment.

I’d like to suggest a third view: When it comes to politics and political institutions, Germany’s record since the end of World War II as an innovator is virtually without parallel, akin to the role of Silicon Valley in tech.

After the war, Germany undertook an extensive and largely successful campaign of denazification. Other defeated nations, such as Austria or Japan, didn’t attempt anything comparable, much less succeed. In a relatively short period of time, Germany really did turn into a largely tolerant, peace-loving nation, acutely aware of the extreme nature of its previous wrongdoing. For all the imperfections in this process along the way, it is difficult in world history to find a comparable switch in attitudes.

Or take German unification. It was hardly obvious this project to bring together East Germany and West after the fall of communism would succeed or even come to fruition, as there was plenty of talk at the time of a binational federation or perhaps a slowly phased evolution toward unity. Yet Chancellor Helmut Kohl and other German leaders, supposedly staid figures, had the vision to see unification could be achieved rapidly and relatively smoothly. They just went ahead and did it, even though many of the world’s leaders, such as U.K. Prime Minister Margaret Thatcher, were squeamish about the idea.


….Increasingly, the handling of the euro crisis of 2008-2012 appears to be another example of German political wisdom. Merkel’s decisions to limit bailouts, push for relatively tight monetary policy and eschew a banking union have been pilloried by many of my fellow economists. Yet in this age of post-Brexit, post-Trump backlash voting, her decisions look pretty savvy, even though they were far from economically ideal.

Something worth debating. Not sure about other political innovations, but the euro crisis handling is seen as a political disaster by many.

In economics, we are often told ultimately it is politics that matters. May be the way Germany has handled its political relations, it is the main reason behind its other successes as well..

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