Archive for June 7th, 2021

Profile of Rohini Pande

June 7, 2021

Profile of economist Rohini Pande:

Pande, 49 years old, is “one of the most influential development economists of her generation,” according to the American Economic Association, and has made groundbreaking contributions to political economy, international development, gender economics, anti-corruption, and efforts to combat climate change.

“Running through her work is an insistence not simply to ask what will work to improve the lives of the poor, but why it works, and what this teaches us about how institutions should be structured and how we should view the world,” says Charity Troyer Moore, Yale’s director for South Asia economics research.

In 2019, Pande was named the Henry J. Heinz II Professor of Economics at Yale University and director of the Economic Growth Center. She spent the previous 13 years as a senior professor at the Harvard Kennedy School. There she co-founded Evidence for Policy Design, which works with developing economy governments to address policy problems. Pande won the 2018 Carolyn Shaw Bell Award for furthering the status of women in economics.

The profile points Rohini is daugher of journalist Mrinal Pande. Google pointed she is also granddaughter of Hindi novelist Shivani. Phew that is some legacy.

Bureaucratic Indecision and Risk Aversion in India

June 7, 2021

Interesting paper by IDFC Institute researchers: Sneha P., Neha Sinha, Ashwin Varghese, Avanti Durani and Ayush Patel.

The Indian bureaucracy suffers from indecision and risk aversion, resulting in an inordinate focus on routine tasks, coordination failure, process overload, poor perception, motivational issues and a deterioration in the quality of service delivery. We argue that bureaucratic indecision, in a large part, is a form of rational self-preservation exercised by bureaucrats from the various legal and extra-legal risks to their person, careers and reputation. These risks originate from problems of organizational design, institutional norms and other political factors.

The research for this working paper included a review of interdisciplinary literature on bureaucracy and policy decisions, combined with semi-structured interviews. We interviewed current and ex-bureaucrats from India and other Asian and African countries, political scientists and other policy researchers. We also conducted a document analysis of historical and contemporary, administrative and legal documents including committee reports, acts and rules, annual reports and other government publications. We summarise the evidence on factors such as penal transfers, overload, inadequate training, process accountability, contradictory rules and political patronage. The paper concludes with a compilation of administrative and normative reform recommendations taking cues from history, state experiences and other country bureaucracies.

20 years of BRIC acronym: Is the emerging world still emerging?

June 7, 2021

It has been 20 years since Jim O’Neil coined the term BRIC – Brazil, Russia, India and China. In this IMF piece, He reflects on the acronym BRIC and way forward for emerging markets:

My primary goal in my first paper, “The World Needs Better Economic BRICs,” was to make a case for changing the framework for global economic governance, not necessarily the inevitable future growth of these countries.

In subsequent papers I laid out what the world could look like, in the highly unlikely event that the countries we studied reached their potential. We defined this potential using the standard methodology for macroeconomics, in which real economic growth is determined by two variables: the size of a nation’s workforce and the economy’s productivity. Because of their population size, the associated size of their workforce, and the scope for productivity catch-up, it was quite easy to show that the potential growth rates of BRICs were higher than those of most advanced economies. What our analysis was not meant to show was that all these countries would persistently grow at their potential. That frankly is not realistic, and not what we intended as our message. 

In this context, the second decade of this century has been quite a contrast to the first decade, which for all four countries turned out even better than in the scenarios I outlined in 2001. While India has notably disappointed in recent years, it is broadly developing along the path we envisioned. For both Brazil and Russia, however, 2010–20 economic performance was very disappointing, which has occasionally led me to joke that perhaps I should have called the “BRICs” the “ICs.” Brazil and Russia have both suffered from the well-known commodity curse and, as evidence suggests, are far too dependent on the world commodity cycle for their own sustainable development. Each of these countries has considerable differences, but they both need to diversify their economies away from commodities and grow the role of the private sector.

In contrast, the ongoing strength of the Chinese economy suggests that it is fully achieving its potential. China’s GDP, in excess of $14 trillion (as of 2019), is more than twice that of the other BRICs in aggregate. The sheer scale of China means that the BRIC economies combined are now larger than that of the European Union and are approaching the size of the United States.

 

The Covid pandemic in the market: infected, immune and cured bonds

June 7, 2021

Andrea Zaghini in this ECB working paper looks at how the pandemic impacted different bond markets in Europe:

By focusing on the cost conditions at issuance, I find that not only the Covid-19 pandemic effects were different across bonds and firms at different stages, but also that the market composition was significantly affected, collapsing on investment-grade bonds, a segment in which the share of bonds eligible to the ECB corporate programmes strikingly increased from 15% to 40%. Contemporaneously, the high-yield segment shrunk to almost disappear at 4%. Another source of risk detected in the pricing mechanism is the weak resilience to pandemic: the premium requested is around 30 bp and started to be priced only after the early containment actions taken by the national authorities. On the contrary, I do not find evidence supporting an increased risk for corporations headquartered in countries with a reduced fiscal space, nor the existence of a premium in favour of green bonds, which should be the backbone of a possible “green recovery”.

 

Choosing Bank of England’s Chief Economist: Manager or Thought Leader?

June 7, 2021

Andy Haldane, Chief Economist of Bank of England resigned recently.

Andrew Sentance, former MPC member in this blogpost looks at the qualities the new chief economist should have:

The Bank of England is searching for a new Chief Economist, and the formal deadline for applications was Wednesday 2 June. But what is the Bank’s Chief Economist expected to do? And what skills and qualifications does he or she need? After all, the Bank has lots of economists. What special responsibilities does our central bank need a Chief Economist to carry out?

In the initial phase, BoE appointed academicians as Chief econs. This changed recently with appointment of people like Haldane:

(more…)

On the Green Interest Rate

June 7, 2021

Prof Nicholas Muller in this NBER research paper explains green interest rate:


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