Archive for the ‘Economist’ Category

Prof Pranb Bardhan’s academic journey – I

July 22, 2021

Prof Bardhan has started writing on his academic journey from Calcutta to Cambridge to Berkeley and beyond. I came across his first post on Business Standard which has been reblogged from 3quarksdaily.com.

This anecdote from Amartya Sen’s childhood reminds one of several stories around children:

In periods when our house was particularly over-crowded with relatives, my father often sent me and my sister and mother off to our maternal uncle’s home in Santiniketan, a small town about a hundred miles north of Kolkata. This town was famous in India for having the residential educational institution established by Rabindranath Tagore.

..

Even though I was not a student at Santiniketan, I used to accompany my friends in the neighborhood who were students to attend the numerous cultural events that took place in the campus every week. Every Wednesday morning there used to be a solemn gathering where the master of ceremony was Kshitimohan Sen (Amartya Sen’s grandfather), a professor of Sanskrit, who used to recite verses from ancient texts and interpreted them, which were almost completely unintelligible to us children; we all used to wait for the beautiful Tagore songs that the sermons were frequently interspersed with.

Amartya-da’s (I have always addressed Amartya in that typical Bengali younger-brotherly way) mother told me that when he was a small child she once took him to that Wednesday gathering where Tagore was the master of ceremony. The child was obviously bored by Tagore’s sermons and the hushed silence around him, so he started blabbering away, and his mother shushed him. At this the child pointed his finger at Tagore, and loudly said, “why is that fellow talking then?” Clearly a pointed argument from an ‘argumentative Indian’! 

🙂

History of Bank economists in India

July 7, 2021

I came across an interesting paper by Murari N Ballal and B.S. Damodar  written in 1980. The paper is titled Economic Research in Banks and is available in a book edited by Dr NK Thingalaya: On bankers and economists.

The paper surveyed economics departments of banks in 1980 and figured their history. RBI was the first banking entity to start a research department in 1943-46 (exact year not clear). In 1955, Imperial Bank was nationalised and renamed State Bank of India. SBI became instrument of State policy with special responsibility of branch expansion and lending in rural areas. As bankers lacked this knowhow of developmental banking, economists were sought in banks. Accordingly in 1956, SBI became the first bank (who else) to have an economic research department headed by Mr DS Shanker.

Post-SBI, Dena Bank, Bank of Baroda, Bank of India and Syndicate Bank established their own ERDs.

In 1969, 14 banks were nationalised leading to all kinds of development targets pushed to nat banks. This led to some more banks establising ERDs and asking economists to assist bankers by giving them research inputs to meet targets.  The ERDs mainly dealt with planning & development work. Therefore, some banks even named their ERDs as Planning and Development Department. Even economists were given titles as Deputy General Manager – Planning.

As per the authors’ research, by 1980 14 nationalised banks had ERDs. Their is an interesting mention of first chief economists (banks had different job title for chief economist at that time) in the paper as well:

Bank Name Year of Establishment Chairperson First Chief Economist
State Bank of India 1956 Dr John Mathai Mr. D.S. Sanker
Dena Bank 1957 NA Mr Pravinchandra Gandhi
Bank of Baroda 1962 Mr. N.M. Choksi Dr A.C.Shah
Bank of India 1962 Mr A.D. Shroff Mr. VT Mathews
Syndicate Bank 1966 Mr. TA Pai Dr NK Thingalaya
Canara Bank 1969 Mr. KPJ Prabhu Dr GV Sathyamurthy
Union Bank of India 1970 Mr. PF Gutta Mr MA Deshpande
Bank of Maharashtra 1971 MR CV Joag Mr AT Akolkar
Central Bank of India 1971 Mr CH Bhabha Mr KR Doodha
Vijaya Bank 1974 Mr Sundar Ram Shetty NA
Corporation Bank 1976 NA NA
Oriental Bank of Commerce 1977 NA NA
Andhra Bank 1979 NA Dr S Vasudeva Shetty
Source: Ballal Murari N and Damodar B.S. (1980), Economic Research in Banks

The key responsibilities of ERD were as follows:

  • Collection and assembling of data on current economic developemnts in India and internationally
  • Corporate planning particularly credit planning.
  • Work related to Lead Bank Scheme. ERD did economic surveys of the districts helping in better allocation of credit and branch expansion.
  • Field Surveys on various facets of banks’ operations
  • Finalise annual reports, notes for regional bankers etc
  • Preparation of speeches and articles for senior execs
  • Pure research work related to banking developments in the country.

Another paper in the book by Mr L D’Mello of SBI mentions that SBI’s Economic & Statistical Research Department was reorganised in three departments:

  •  Chief Economic Adviser’s Secretariat: CEA is expected to be a common man assisting the corporate management of the bank in economic policy formulation.
  • Economic Research Department: Scanning of economic environment with a view to help the bank in decision making. Also helps in annual reports, monthly review and so on
  • Area Planning and Special Studies Department: Preparation of district credit plans under Lead Bank scheme and regional plans

I don’t know whether there has been any follow-up research on how roles of bank economists have changed since 1980. This is especially interesting when we compare 1980s ERDs with ERDs today. Most of ERDs are involved in treasury work : forecasting macro variables, interest rates, RBI policy, Union Budget and so on. There is hardly anyone doing credit/branch planning. Much of this obviously changed post 1991 reforms when interest rates/exchange rates were deregulated. Bank economists were once again drawn to the new challenges of post deregulation world.

Will be interesting to track this history..

 

How Italy produced a large number of influential economists in last 40 years?

June 29, 2021

Enrico Nano, Ugo Panizza, Martina Viarengo in this voxeu research:

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.

Grave sites of famous economists

May 28, 2021

Prof Malcom Rutherford of Univ of Victoria has compiled pictures of grave sites of famous economists:

This web page contains details of the grave sites of famous economists. Where possible original photographs are included, otherwise a link is provided to pictures available on findagrave.com or on another site. I have also provided links to Wikipedia pages concerning the economists listed and to the graveyards or churches where they can be found. Wikipedia entries are not entirely reliable, but I was struck by how may of the economists listed here have Wikipedia pages. Perhaps by including these links some of my colleagues in the history of economics might be motivated to improve the entries on Wikipedia. I am also always interested in new pictures and information on the whereabouts of other famous economists.

Location of top doctorate programmes: Evidence from young economist awards

May 4, 2021

Economist as a Tailor: Creativity in the art of sewing, crafting and recycling

April 26, 2021

Jeemol Unni, Professor of Economics at Ahmedabad University dons the hat of a tailor with aplomb.

Sewing is a hobby I cultivated when I was a child, later as an adolescent and continued as an adult till the present! If sewing is being creative and creativity is in the genes, then I am sure it came to me from the maternal side of my family. My grandmother and my mother enjoyed sewing and taught me various tricks of the trade even as a child. Both of them had sewing machines. My grandmothers’ was what one sees in tailor shops in India, set on a table, with a pedal at floor level. The manual sewing machine was operated by running the pedal with the feet. Grandma would encourage me to run it and stitch in straight lines on old cloth even when I was a child. She taught me the etiquette of sewing, even how to hold a needle. You point the needle towards yourself when stitching by hand! She, my mother and the teacher in school taught me various kinds of embroidery stitches. However, my interest was more in sewing with a machine.

My mother had a manual sewing machine run by hand which she converted into a motor run machine. She made all my frocks and skirts and more for my cousins as well. She taught me to cut and sew dresses, how to cut the neck, the sleeves, and how to stitch it. Some of the gems she taught me was how to cut the cloth used to hem or stich the neckline. Strips of cloth are cut diagonally to allow for greater stretch while stitching the neckline. I have had a hand-run sewing machine for ages, with a handle that you spin to run the machine. Never converted it to a motor run one as I use it not-so-frequently given my full time profession as an Economist. 

 

What Three Economists Taught Us About Currency Regimes

April 22, 2021

Prof Jeffrey Frankel in this Project Syndicate Article pays tribute to the three economists who passed away recently:

Today, freely floating exchange rates suit most large countries better than the late economists Richard Cooper, Robert Mundell, and John Williamson thought. But some countries do well with firmly fixed exchange rates, while at least half of the world’s countries fall in between.

Rest in Peace: M Narasimham was the doyen of banking reforms in India

April 21, 2021

My tribute to Shri M Narasimham. I look at the famous song from the bank Police “Every breath you take”:

The impact of the Narasimham Committee reports continues to weigh on the Indian banking system. It is fair to say that most developments in the Indian banking have some foundation in the Narasimham reports. One can visualise Narasimham perched on his heavenly abode singing this song by The Police to the RBI and every banker: “…Every move you make, Every bond you break, Every step you take, I’ll be watching you!”

In the same piece I also pay tribute to economist John Williamson who also passed away recently.

I paid tribute to Prof Robert Mundell yesterday.

What times. Oh God have some mercy!

Rest in Peace: John Williamson who coined the phrase Washington Consensus

April 19, 2021

John Williamson of Peterson Institute who worked and coined the term Washington Consensus passed away on 11 Apr 2021.

The Peterson Institute for International Economics mourns the passing of John Williamson, a renowned international economist, and a founding senior fellow at the Institute, who died April 11 at his home in Chevy Chase, MD, at the age of 83. Williamson’s pioneering work on development economics, exchange rate regimes, international monetary reform, and many other subjects influenced the entire field of international economics. He was a prolific author and treasured mentor to many generations of scholars and policymakers, especially during his 32 years at PIIE.

John’s career included service at the UK Treasury, the International Monetary Fund (IMF), the World Bank, the University of Warwick (UK), the University of York (UK), Pontifícia Universidade Católica do Rio de Janeiro (Brazil), the Massachusetts Institute of Technology, and Princeton University. Beyond his career, he was a legendary and lifelong birdwatcher and conservationist, who observed and recorded more than four thousand species of birds throughout the world. His scholarship and policy leadership were matched by his unflinching integrity, infused with wit, kindness, and humility. The Peterson Institute is profoundly grateful for the many condolences it has received.

Lots of tributes highlighting how his career was much more than Washington Consensus.

The Man Who Discovered Capitalism: A Documentary on Schumpeter for Use in the Classroom

April 9, 2021

John T. Dalton and Andrew Logan of Wake Forest University in this paper review the documentary on Schumpeter:

We describe how the 2016 documentary The Man Who Discovered Capitalism can be used in the classroom to provide an entry point to the life and economics of Joseph A. Schumpeter, whose work on innovation, entrepreneurship, and creative destruction remains relevant for students today.

We summarize the key ideas conveyed in the documentary and offer four criticisms: its failure to capture the role of fin-de-siecle Vienna on Schumpeter’s intellectual development, its incomplete understanding of Schumpeter’s theory of innovation, its overstatement of Keynes’s influence relative to Schumpeter, and the overly generous credit it gives to government for spurring innovation.

We show how the documentary can be used in the classroom, complete with sample discussion questions grounded in the criticisms we identify. We argue The Man Who Discovered Capitalism is an effective teaching tool suitable for a variety of courses, including those on economic growth, intermediate macroeconomics, and the history of economic thought, among others.

Superb. We need more such efforts of making documentaries on key economists and then build material to discuss the ideas. One good way to promote and make history of economic thought exciting!!

The Individual Failings of Economics

April 2, 2021

Prof Ricardo Hausmann in Proj Syndicate:

In recent decades, economics has gone from defining itself as a set of questions to defining itself as a set of methods, all based on individuals making decisions. By doing so, it has undermined its own ability to make progress.

Sequencing the Post-COVID Recovery: Lessons from Keynes

March 17, 2021

Robert Skidelsky in Proj Synd:

As countries emerge from the COVID-19 pandemic, John Maynard Keynes’s emphasis on the need to implement post-crisis economic policies in the right order is highly relevant. But sustainability considerations mean that the distinction between recovery and reform is less clear cut than it seemed in the 1930s.

……

For starters, full-employment policy is now obviously linked to employability, which was simply not the case in the 1930s. The reason so many people were out of work back then was not that they lacked the skills required by industry, but rather that aggregate demand was insufficient.

Keynes thus wrote in December 1934 that the purpose of the government spending a “small sum of money” was to get “private individuals and corporations to spend a much larger sum.” What they spent it on was of no further concern to policymakers.

But in today’s age of automation, no government can afford to take such a cavalier attitude to the sustainability of employment. As early as 1930, in fact, Keynes foresaw technological unemployment as a problem that would be outside the scope of demand management.

Since then, the accelerating threat of job redundancy has enlarged what Keynes called the “agenda” of government. In particular, the state must be centrally concerned with the speed of technological innovation, the choice of technologies, and the distribution of the productivity gains that technology enables.

 

Charles Goodhart’s contribution to monetary economics and central banking

March 17, 2021

CentralBanking.com has given life-time achievement award to Charles Goodhart.

The website has a profile of Goodhart’s works and Goodhart’s Law:

Goodhart’s influence on central banking has stemmed from his ability to link creative ideas to immediate practical decisions. He is characterised by colleagues and peers as a brilliant and generous person with a formidable ability to process complex concepts, smoothly linking theory with practice, and explaining it all in terms understandable by non-experts. He has forged long-standing relationships (and friendships) with countless central bankers, economists and financiers all over the world – often well beyond his official engagements. Goodhart’s influence is related to the intellectual challenge, and frequently in the background. He does not appear to have a hidden agenda, and makes little effort to seek attention. Some officials say their respect for Goodhart has only risen the longer they have known him.

He is also renowned for patiently giving his time to train younger generations of officials interested in central banking, financial stability and the financial system, including work with Central Banking’s training and other services over many years. Goodhart played an important role in the rediscovery of monetary policy (which had largely disappeared due to adherence to Keynesian philosophies) in the UK, the creation of Hong Kong’s peg and the establishment of the ‘New Zealand model’, where operationally independent central banks work to meet a specified monetary target set by government – something that would spread to Australia, Canada, Sweden and ultimately back to the UK. His research into FX markets highlighted the failings of traditional theory, and has contributed to policy-makers having a firmer grasp of their influence and impact when it comes to communication and intervention.

Profile of America’s first Black economist: Dr. Sadie T.M. Alexander

February 22, 2021

NY Fed has a profile of Dr. Sadie T.M. Alexander. She earned her PhD from University of Pennsylvania in 1921.

PhD thesis title was “The Standard of Living Among One Hundred Negro Migrant Families in Philadelphia“.

Open Letter to Economic Advisers to the Government: Convey the economics and not the politics

February 18, 2021

Jason Furman, former Chair of the Council of Economic Advisers to US President writes an open letter to the current chair: Cecilia Rouse. However the letter applies to all such economic advisory positions across the world:

Dear Council of Economic Advisers Chair,

Congratulations! You now have a prestigious job, a wonderful title, and a beautiful office. What you do not have is any statutory powers or responsibilities (okay, you have one responsibility: issuing the annual Economic Report of the President). No one needs to check anything with you or listen to you, let alone do what you say.

You do have one power: the opportunity to persuade. If people think you have some useful insights or inputs, might be right in what you say, and are generally a helpful member of the team, then you just might be able to shape some of the most important decisions the President will make and help to make positive policy happen. But nothing about this power is automatic or happens by virtue of the nice office you now have. It depends on how you use it. These five tips might help:

 

 

Why Central Bankers Should Read Economic History

February 9, 2021

Prof Eric Monnet of Paris School of Economics in this long piece writes why central bankers should read economic history:

How can economic policy-makers use economic history as a guide for their deliberations and decisions? Focusing on the case of central banking, this essay argues that the virtue of history is not only to improve economic models and quantitative studies, but to provide a perspective distinct from standard economic reasoning.

 

 

UK Treasury looking to appoint head of monetary policy

January 18, 2021

Interesting bit from UK Treasury (UK’s Finance Ministry). It is looking for Head of Monetary Policy to be part of its Fiscal Group!

The Treasury is the United Kingdom’s economics and finance ministry. It is responsible for formulating and implementing the government’s financial and economic policy. Its aim is to raise the rate of sustainable growth, and achieve rising prosperity and a better quality of life with economic and employment opportunities for all.

The Fiscal group is responsible for ensuring the sustainability of the public finances, over both the medium term and the long term, and for setting short-term fiscal policy so that it meets the government’s economic objectives for stability and growth. Operationally, it ensures that government’s financing needs are met, over both the short and medium term.

About the Team
The recently established Macroeconomic Policy (MP) team is responsible for developing the department’s thinking and advising ministers on macroeconomic policy. This includes short-term fiscal policy and monetary policy strategy. We work across Fiscal and Economics groups.

Key Accountabilities
This post offers an excellent opportunity for candidates looking to work on an exciting range of topics and develop a broad range of skills. The post holder will be joining an energetic community of analysts and policy advisers.

Key responsibilities include:
1. Advising the Chancellor, Special Advisers and the Treasury’s Executive Management Board (EMB) on the evolution of the UK’s monetary policy framework. Explore policy options for the remit of the Monetary Policy Committee (MPC) to support the delivery of the government’s economic objectives, and the implications of trends, such as low structural interest rates.
2. Advising the Chancellor and EMB on UK monetary policy developments. Including changes in the stance of monetary policy (including unconventional monetary policy such as Quantitative Easing) and the consequences for the government’s economic and fiscal objectives.
3. Ensuring the coordination of monetary and fiscal policy by supporting the Chief Economic Advisor in their role as Treasury representative to the MPC and the Chancellor’s discussions with the Governor of the Bank of England.
4. Leading the branch’s analysis on the economic and operational implications of monetary policy decisions, and potential future monetary policy tools.
5. Supporting the Treasury’s Chief Economic Advisor in appointing external members to the MPC. This involves designing and running a fair, open and competitive recruitment process.
6. Developing and maintaining engagement with the Bank of England staff.
7. Line managing one Range D – providing leadership, support and stretching opportunities.

Interesting. Monetary policy is getting increasingly complex and the Treasury wishes to be informed on how MOn Policy is evolving in UK and its future.
Eve this bit is super cool:
If you wish to discuss the post in more detail, the line manager (Matt Richmond, matthew.richmond@hmtreasury.gov.uk) would be delighted to chat with you!
🙂

A Brief History of the Editions of the Theory of Moral Sentiments

January 5, 2021

Erik Matson of George Mason University in this new paper:

This essay provides a short sketch of the changes in the editions of Adam Smith’s ‘Theory of Moral Sentiments.’ I begin with a treatment of the first five editions, focusing on Smith’s responses to comments from David Hume and Gilbert Elliot and the addition of the “Languages” essay to edition 3. I then dwell on edition 6 of TMS, as it was the last thing Smith published during his lifetime and features a significant set of changes. I conclude with some comments on the arc of Smith’s development and what I take to be his shifting focus away from moral anatomy towards moral painting.

 

The non-Scorsese version of being an investment bank economist

January 4, 2021

Aurodeep Nandi of an economist at Nomura India writes an account of his work profile. He calls it non-Scorsese version as Hollywood director Martin Scorsese presented a very different account of what it means to work in an i-bank.

There’s an old joke that economic forecasters assume everything except for responsibility. Clearly, they weren’t talking about investment bank economists. Because your credibility depends tenuously on how accurately you manage to forecast. Traders will harangue you on whether your next inflation reading is 5.9% or 6% or 6.2%. And you could be a seasoned economist with decades of experience under your belt…but in the market, you’re ultimately only as good as your latest forecasts turn out to be.

Inherent in all of this is the great scam of it all – economists have no special crystal ball that makes them exceptional forecasters. There is nothing Nostradamic that’s taught to us in economics courses in universities – most formal forecasting tools will struggle to discern any difference between a 5% or a 6% number. Or tell you if a crisis is right ahead. I was a student at the London School of Economics during the year of the Global Financial Crisis, and Queen Elizabeth II had come to visit. She ended up embarrassing the high and mighty there by asking why none of them could see the crisis coming. There is actually a long, panicky letter available on the internet that was sent to Buckingham Palace to placate her!

Unfortunately for investment bank economists, financial market investors are less understanding than the Queen. Economists get ranked like race horses on the accuracy of their forecasts. And the truth is that beyond the fences of conventional theory and number crunching, finally deciding on your forecast is a little bit like being a character on Sopranos who’s wondering if he’s next on the mafia hit list – it’s a gut feel! And so, like crossing a busy road, we look left and right at what the ‘consensus’ is forecasting, which is industry jargon of checking what majority are saying.

Much more in the article…


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