Archive for the ‘Growth and development’ Category

New Zealand’s remarkable economic transformation – an unsung story

September 23, 2016

Daniel Mitchell has a post on the small open economy which is hardly in anybody’s focus. Being from Cato, Mitchell obviously makes it a more market less government story:

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Singapore as a model for economic transformation – case of state planning or markets?

September 22, 2016

Recently Govt of India invited Singapore PM Tharman Shanmugaratnam for the inaugaral Niti Aayog’s transformation lecture. As expected, much of discussion which followed was around we could use Singapore’s market driven model to drive economic growth.

Prof. Pulapre Balakrishnan disagrees with the narrative.  He says it is Singapore’s history of development is as close to socialistic planning as it can get. This is even more ironic as the lecture was held at Niti Aayog which recently replaced Planning Commission:

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India and Pakistan: A tale of two economies

September 19, 2016

Ankit Mittal has a nice article comparing India and Pakistan economies historically. The younger lot may not know but there was a time when Pakistan had better economic and social indicators. Infact as Mittal shows, there is very little to seperate between the two countries.

In the end it all boiled down to institutions in the two countries. In India, they were bent but did not break down. Though in Pakistan this was not the case:

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The Scandinavian fantasy: The sources of intergenerational mobility in Denmark and the US

September 15, 2016

Rasmus Landersø and James Heckman poke holes at the Scandinavian economic model:

Robot Macroeconomics: What can theory and several centuries of economic history teach us?

September 6, 2016

Bank of England may be clueless on what next, but its blog Bank Underground keeps giving us food for thought via its posts.

In the recent one, John Lewis looks at this question of how robotics will impact macroeconomics. Will it lead to lower jobs as said and so on. For this, he draws upon years of history where some new technology has replaced an existing one.

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Europe needs its own Alexander Hamilton (why not Sardar Patel?)…

September 2, 2016

History keeps going in circles. Adam Smith had said US should not get into industrialization. But Hamilton as the first Treasury secretary went against Smith and proposed industrialization. Infact, Hamilton actually tried to shape US like Europe based on his tour of the continent.

With the ongoing Europe mess, the continent is searching for its own Hamilton. Earlier Prof Harold James had suggested Europe to search for its Hamilton and now Prof. Sylvester Eijffinger of Tilburg University makes the case:

 It goes through similar arguments made in the past as well.
In all these discussions, we hardly read any research on lessons from Sardar Patel who integrated India despite all odds. Patel is mostly called as Bismarck of India but the comparison is hardly apt. What Patel did was much more and far more complex. But we seem to love these tags which connect our leaders to some western leader no matter the context and scale of operations.
In this we are ourselves to be blamed. We have just played our integration story in a superficial manner. Older generations atleast knew much but current is mostly clueless on these matters. Even knowing that so many princely states were made part of the Union is seen as enough.
The story could be given a different spin to appeal to today’s audience especially on the economic front. How did fiscal and monetary union happen as these princely states ran variety of policies. Some just did as British said and some others were more independent to do their bit. These latter ones opened their state banks which were like central banks for their provinces. These State Banks were later called as SBI Associate Banks and now being merged with SBI. How did the transition from their state banks to RBI happen?
Likewise,  most princely states would be doing their own fiscal policy as well. Infact they could be having more control over fiscal policy than monetary policy. There is little clarity over these matters. It is fascinating to read how India and Pakistan seperated their monetary union in RBI’s first history volume. This itself could be spun into if Euro does away with its union, what lessons can be learnt from India-Pakistan union?
So Sardar Patel and team not just got this political integration but even the economic integration as well. There is some clarity on political side but very little on the economic side.
Much of India’s economic history is about how little we have achieved. It is the usual stuff on how we were 25% of world economy till British came in. An since then we became more and more insignificant in world affairs till 1991 came and changed everything.
But there are areas where we achieved quite a bit. This political and economic integration exercise is as big an achievement as any. To see how it has stuck despite so many stalwarts warning it will break-down is a huge testimony of the achievement. Just that we don’t tell the story enough in as many ways as possible.
Infact who knows, we could have very different set of people who are unknown who stitched these ideas. Sardar Patel could have played a minor role on these very matters. It is actually not the individuals that matter but the ideas that were generated in the process.
There is a lot to learn and figure in Indian economy than just the usual stuff…

Why would a government adopt harmful policies, and why would society go along?

August 5, 2016

Prof Ricardo Hausman asks this question taking the Venezuelan example:

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Seeing China Through Its Economic History

July 29, 2016

Tyler Cowen who also writes for Bloomberg View now has a piece there.

He says we are too pessimistic on China. He draws lessons from history:

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How industrial cluster policy leads to inter-firm transaction networks

July 22, 2016

Three Japanese researchers (Toshihiro Okubo, Tetsuji Okazaki and Eiichi Tomiura) point to this interesting research.

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What after all is meant by One Belt, One Road? Will it reshape global trade?

July 21, 2016

A good discussion at McKinsey over the One Belt One road or OBOR plan by China.

The first q is what exactly is One Belt, One Road?

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Welcome To Hell – Central Banking At Work In Brazil and Beyond

July 7, 2016

But Lula’s term was anything but that. Brazil made major inroads in Global Economy Prospects. It is part of BRIC club, hosting both Olympics and World Cup Football etc.

Why Ecuador escaped the fate of Venezuela despite following near similar policies?

June 30, 2016

With Prof Hanke you know the answer is always going to be dollarisation or currency boards.

So here it is. Prof Hanke says Ecuador which adopted dollarisation before its Socialist President helped save the country:

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Columbus will continue to recognise the landscape once discovered..

June 22, 2016

William F. Maloney and Felipe Valencia Caicedo have a superb piece on the topic.

How persistence is the linkage certain regions and economic fortunes? A lot perhaps. What were the most inhabited regions in 1492 continue to be the richest places today:

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How will Austrian school resolve the woes of Austrian economy?

June 16, 2016

This is a very interesting article by Prof Dalia Marin of University of Munich.

Austrian economy seems to be reeling for very different reasons. Usually, we see poor macro policy for poor economic performance. But this one is hardly a case of poor macro:

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Why did East Germany not become like South Italy?

June 14, 2016

Andrea Boltho, Wendy Carlin and Pasquale Scaramozzino look at this bit of fascinating history.

Profound changes in economics have made left vs. right debates irrelevant..

June 2, 2016

Eric Beinhocker has a long piece on how economics can become a better subject.  He says we need to make economics more realistic and that should be a good thing.

The idea is to move from the traditional camp based thinking to new thinking which is more flexible.

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How surnames continue to matter for economic status even over six centuries….

May 19, 2016

There is a lot of criticism on Indian society for lack of inter-generation mobility. But pretty much similar things exist in western societies as well.

In this paper, authors look at an example of mobility from Florence, Italy:

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How state institutions forged during the Protestant Reformation drove development in Germany..

May 5, 2016

Jeremiah Dittmar and Ralf Meisenzahl have an interesting research on the topic. They look at role of social institutions in development.

They use the tool made popular by likes of Acemoglu/Robinson. One region gets these social institutions and other does not? What is the overall impact on one vs the other? This time the region is Germany and we have cities instead of countries. There were certain cities where Protestant movement led to development in some cities over others:

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Why birthplace matters so much in human capital: Case of Sorting, learning and geography

May 4, 2016

One always believes that those born in bigger cities usually have more advantage then those in smaller places. Those in former category get better schools, public services, a wider social network and so on.

So in this article Clément Bosquet and Henry Overman look at this aspect of role of location in human capital:

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What drives growth in America’s metro regions?

May 4, 2016

Chris Benner and Manuel Pastor have been workin on a project looking at local regions in US and what drives growth in them. It is called Just Growth? Social Equity and Metropolitan Economic Performance. Here is an excerpt from the book.

Here is an interview of Chris Benner. He says unlike what most think, more equal the region, higher is its growth:

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