Archive for March 4th, 2019

Italian Opera, World Fairs and Innovation

March 4, 2019

Prof Petra Moser of NYU has done some fascinating research on the topic.

IMF Podcast interviews her over the research findings.

The effects of copyright and patent laws on artistic creativity and technological innovation are gaining more and more significance in today’s economy driven to a large part by content. Economic historian Petra Moser uses data from 19th century Italian operas and world fairs to examine the economic implications of basic copyright and patent protection for innovators. In this podcast, Moser describes how Napoleon’s military victories in Italy in the late 1700s changed the copyright landscape and created an excellent model to study the effects on Italian opera composers.

 

How undistributed profits help in central banking: Case of Swiss National Bank

March 4, 2019

One is trying to learn how other central banks manage their reserves and profits business.

Swiss National Bank released annual results for 2018. SNB is unique as it is a shareholder central bank. Government owns 58% of the bank but that is by the Canton (States)! The central government does not own any shares but the SNB is accountable to it.

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Book review of Harilal and Sons: Family Narrative as Business History

March 4, 2019

Sujit Saraf wrote this novel by the name Harilal and Sons:

It is the year 1899. In the north western corner of British India, the Chhappaniya famine stalks the desert region of Shekhavati. A despairing shopkeeper turns to his young son and says, ‘This land has nothing to offer us but sand dunes and khejra bushes.’ Soon after, twelve-year-old Harilal Tibrewal, recently married to eleven-year-old Parmeshwari, sets off, alone, for the densely populated plains of Bengal in eastern India—travelling on camelback and by bus, train and boat to arrive in Calcutta, two thousand kilometres away.

In his new novel, Sujit Saraf takes readers on an epic journey from Shekhavati in Rajasthan to the Calcutta of the early twentieth century, to Bogra in East Bengal and to a village in Bihar in newly independent India. A sprawling, compulsively readable narrative, it follows the story of Harilal as he sets up Harilal and Sons, a shop selling jute, cotton, spices, rice, cigarettes and soap, that grows into a large enterprise. It is also the sweeping tale of his two wives and ever-burgeoning family of sons, daughters, grandchildren, great-grandchildren and great-great-grandchildren—the two strands of family and business inextricably fused because a Marwari’s life is defined by what he ‘deals in’. The novel ends in 1972, as eighty-five-year-old Hari lies dying in the great mansion that he built but never actually lived in. Surrounded by his vast family he wonders why he is still so attached to them. Why has he not reached the third stage in life, the stage of detachment, that his schoolmaster had said he would?

Spanning seven decades of an era that saw great tumult in India and Bangladesh, Harilal and Sons is a wonderfully evocative, powerful and capacious narrative—overflowing with a profusion of characters, events and places—contained within the singular life of one man who ‘dealt in jute and grain’.

Thomas Timberg who wrote the famous book on Marwaris in this book review in EPW says this novel could be used to figure business history. He says the story closely resembles that of GD Birla:

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Universal Basic Income in the Developing World

March 4, 2019

Two interesting articles on UBI.

First is this new NBER paper by Abhijiet banerjee, Paul Niehaus and Tavneet Suri:

Should developing countries give everyone enough money to live on? Interest in this idea has grown enormously in recent years, reflecting both positive results from a number of existing cash transfer programs and also dissatisfaction with the perceived limitations of piecemeal, targeted approaches to reducing extreme poverty. We discuss what we know (and what we do not) about three questions: what recipients would likely do with the incremental income, whether this would unlock further economic growth, and the potential consequences of giving the money to everyone (as opposed to targeting it).

Bottom line:

First, the benefits of targeting may be overestimated by analyses that do not take into account the incentives it generates or the realities of implementation on the ground. Universal or near-universal approaches deserve more consideration than they often receive.

Second, the kinds of targeting that will make most sense will often be relatively simple, such as geographic targeting. Designers should guard against creating too much discretion for the front-line staff who implement targeting, including the implicit discretion that is created when a policy is too
complicated for beneficiaries to understand it and hold local officials to account. However, these targets may perform extremely poorly in reaching the poor.

Third, it may be possible to build small ordeals into the design of programs to create some targeting by self-selection and hence make programs more progressive. For example, if a government offered a small basic income to everyone but with some hassle costs involved in collecting it (e.g.
a weekly trip to an ATM), then the wealthier households might simply not bother to participate. The danger here of course will be to not exclude those for whom the ordeals are simply too difficult (e.g. the disabled) and so special provision should be made for them.

Finally, we note that the per-person costs of delivering transfers are falling rapidly in many places due to advances in last-mile digital payments infrastructure. All else equal this will tend to further increase the appeal of broad or universal targeting.

Hmm..

Mint features this interview of Prof Guy Standing of  School of Oriental and African Studies, University of London. He says instead of spending billions on subsidies and government programs, one should just transfer a basic income universally:

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