How birth control/planned parenthood changed everything…

October 21, 2016

This week is the 100 year anniversary of the first birth clinic in US  which opened 16 Oct 1916.

Charlote Altar of Time has a superb article telling us how difficult and taboo it was to open such a clinic in 1916 even in the US. It all started with a nurse called Margaret Sangner who just changed everything:

There was not yet a “secret” birth control that could prevent pregnancy, but there was an enormous amount of ignorance about basic biological processes. So Sanger started writing, aiming to prevent young girls from “entering into sexual relations whether in marriage or out of it, without thinking and knowing” how their bodies worked. Multiple essays she wrote were banned as obscene, she was indicted and she fled the country. She returned when one of her children died of pneumonia, and the charges were dropped.

That’s when Sanger, along with her sister Ethel Byrne and a nurse named Fania Mindell, started the first birth control clinic in the United States, which opened its doors on Oct. 16, 1916 at 46 Amboy Street in Brooklyn.They distributed pamphlets that said: “Can you afford to have a large family? Do you want any more children? If not, why do you have them? DO NOT KILL, DO NOT TAKE LIFE, BUT PREVENT.” Women lined up around the block, paying 10 cents to meet with the nurses.

The clinic stayed open for only nine days before it was shut down by an undercover policewoman posing as a patient. It opened again and was shut down again, and Sanger was arrested for maintaining a public nuisance. She opened the clinic a third time, on Nov. 16, but authorities forced the landlord to evict her, and all three women were arrested. When Sanger appeared before the judge, he waved a cervical cap from the bench and argued that no woman should have “the right to copulate with a feeling of security that there will be no resulting conception.” She went to jail for 30 days.

Even though the first clinic stayed open for only nine days, it was the beginning of a birth control movement that would radically revolutionize the way women live their lives, and the way society functions. Five years later, Sanger founded the American Birth Control League in 1921. Twenty-one years after that, that organization was renamed Planned Parenthood.

Planned Parenthood was at the forefront of every birth control milestone of the 20th century.

The idea though was not hers. People realised it earlier that they needed to control number of children:

Sanger’s movement didn’t happen in a vacuum. The birth control movement had its roots in earlier social-justice movements: when women became involved in the abolition movement in the first half of the 18th century, they began to realize that the size of their families determined their ability to participate in the outside world. That’s when family size began to fall for the first time, according to Jonathan Eig, author of The Birth of the Pill. “Women realized that if they want to stay engaged in the community, if they want to stay active, they have to have fewer children,” he tells TIME. “That’s when you start to see women realizing that there is a tie between family size and political power.”

The personal and political ramifications of that first birth control clinic are countless. “You can look at all of human history and see that for 99% of it, women were considered objects, like vessels for birthing and caring for children,” says Eig. “Once you can control your own body, you can control your own life, and then you can assert yourself in your family, your community, in the workplace.”

It is no coincidence, then, that the rise of birth control coincided with women gaining power in politics, business, education and numerous other areas of life. Though the paths to that power may have varied, every one is connected to the ability to control family size.

“It seems like a long time, a hundred years,” Eig says. “But if you think about how much has changed in a hundred years, how unimaginable this would be—women on the Supreme Court, a woman running for president, there’s no doubt that it’s all connected to access to reliable birth control.”




The significance of MPC and its first decision are overstated…

October 21, 2016

On one hand, hunger issues continue to be ignored despite its obvious importance. But on other things related to Indian central bank continue to be written and debated extensively without much importance.

EPW edit says much is written about recent monetary policy decision (sorry resolution).  But the overall gains are overstated and hyped:

The government, which has long sought a rate cut from the RBI but did not obtain one, is certainly pleased. Industrial capital, experts, and sections of the business press have also welcomed the reduction in the repo rate hoping that it will induce private sector investment. However, the risk of high inflation in the near future remains, from possible global increases in fuel prices as well as domestic demand surges following the roll-out of pay increases for government servants. However, the view that monetary policy will by itself affect inflation tendencies, or that it will induce investment in the economy is misplaced. Inflation is caused by many factors largely outside the RBI’s control, and investment is essentially a function of the state of long-term profit expectations, which is not promising at the present. To expect that the cut in the repo rate at this time will magically “restart the investment cycle” is excessively optimistic.

The MPC’s decision has pleased the government but to expect the committee to be a significant forum in which a democratically elected government can intervene in monetary policy is an overestimation of its role and importance. In its current form, the MPC is but an addition to the larger framework where an independent central bank focuses on targeting inflation within a certain range. The MPC is “entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level.” It is to be held accountable for this role, and the minutes of its meetings will be made available to the public. Even as these moves for transparency are important international practices to adopt, the MPC’s mandate for which it is to be held accountable is itself a truncated one.

Inflation targeting is distinct from the multiple-indicator approach that was followed by the RBI earlier, which looked at not only inflation but various quantity and rate variables such as credit, output, and the exchange rate, among others. Inflation targeting has grown out of regulatory frameworks in economies with developed institutions and financial markets, and clear sources of inflation. These economies have sizeable financial markets and services. Earlier, such a single-target approach to monetary policy was not considered very useful in economies like India, where financial markets are far from developed, and inflation sources are vulnerable to food and fuel shocks, making it difficult to identify a “core” stable inflation to target. Two previous governors of the RBI—Y V Reddy and D Subbarao—were not in favour of switching to the inflation targeting approach. Yet this approach has been adopted.

Inflation targeting continues to be considered the “gold standard” of monetary policy in advanced economies. This is even after central banks following such a policy mechanism failed to diffuse asset price bubbles that led to the 2008 global financial crisis. It is largely this mainstream intellectual push in economic policy research that has aided the near universalisation of this rule-based approach to monetary policy in central banks worldwide. The Fiscal Responsibility and Budget Management Act, 2003 that targets low fiscal deficits is already constraining public expenditure on employment generation, food security, healthcare, and education. With inflation control as the primary target of the RBI, further constraints on provisioning of public goods and services are inevitable.

 This is a really old debate.

Should India have these developed world policy frameworks before becoming anywhere closed to developed? Or is it that these frameworks will lead to a developed economy?

History shows that though these ideas of monetary and fiscal rules/targets have been there for a while, countries have been really random at  implementing them. It is only post 1990s that both monetary and fiscal targets became not orthodoxy amidst economists but even policymakers. For most parts of their history, the developed world has spent and stimulated as per its wishes. Likes of Ha Joon Chang nicely call it as kicking the ladder.

There are merits and demerits on both sides. What should be followed is not blind aping of the western ideas. But to look at local contexts and make policies accordingly.

Hunger is India’s greatest problem even today. So why don’t we ever hear about it?

October 21, 2016

Shoaib Daniyal of Scroll asks this uncomfortable question. Given all the hype about India shining and fastest growing  economy in the world, we were ranked 97 in global hunger index.

Barring reporting of the index, there was barely any discussion on it. Why?

Read the rest of this entry »

More education leading to more skills is just a delusion..

October 21, 2016

Adair Turner has a piece which one is beginning to realise. Higher education is hardly bringing the kind of rewards it brought earlier.

Everybody agrees that better education and improved skills, for as many people as possible, is crucial to increasing productivity and living standards and to tackling rising inequality. But what if everybody is wrong?

Most economists are certain that human capital is as important to productivity growth as physical capital. And to some degree, that’s obviously true. Modern economies would not be possible without widespread literacy and numeracy: many emerging economies are held back by inadequate skills.

But one striking feature of the modern economy is how few skilled people are needed to drive crucial areas of economic activity. Facebook has a market value of $374 billion but only 14,500 employees. Microsoft, with a market value of $400 billion, employs just 114,000. GlaxoSmithKline, valued at over $100 billion, has a headcount of just 96,000.

The workforces of these three companies are but a drop in the ocean of the global labor market. And yet they deliver consumer services enjoyed by billions of people, create software that supports economy-wide productivity improvements, or develop drugs that can deliver enormous health benefits to hundreds of millions of people.

This disconnect between employment and value added reflects the role of information and communications technology (ICT), which is distinctive in two crucial respects. First, in line with Moore’s Law, the pace of hardware productivity improvement is dramatically faster than it was at earlier stages of technological change. Second, once software is created, it can be copied limitless times at almost zero marginal cost. Taken together, these factors enable low-cost automation of ever more economic activities, driven by the high skills of only a tiny minority of the workforce.

Despite this phenomenon, more people than ever seek higher education levels, evidently motivated by the fact that higher skills bring higher pay. But many higher-paid jobs may play no role in driving productivity improvement. If more people become more highly skilled lawyers, legal cases may be fought more effectively and expensively on both sides, but with no net increase in human welfare.

So is all higher educ useless? Not really, as it will enable us to enjoy good things of life:

So “better education and more skills for all” may be less important to productivity growth and a less powerful tool to offset inequality than conventional wisdom supposes. But that would not undermine in the least the personal and social value of education.

As many people as possible should be highly literate, aware of and fascinated by the basics of science, and enthused by and able to understand good design or music. After all, in a world where automation can free us from the drudgery of endless work, a good education will better equip us to live satisfying lives, regardless of whether it increases individual pay or measured prosperity.

As for inequality, we may need to offset it through overt redistribution, with higher minimum wages or income support unrelated to people’s price in the job market, and through generous provision of high-quality public goods.

In a world where robots can increasingly do the work, education and skills are more important than ever – not because they can raise everyone’s price in the labor market, but because they can equip us for lives in which many jobs no longer deliver adequate income, satisfaction, or status.

Economics textbooks divide our time into work and leisure. The earlier notion was that the more edu etc helped us get more and better work and higher incomes. Now, we are saying higher educ will help us enjoy leisure better…

Here’s what economists don’t understand about race…

October 21, 2016

We just ape economics taught in the US. But now US seems to be looking at issues which have long troubled India.

I had written about Fed looking to increased diversity in both its employment and policy. But perhaps this is just the tip of iceberg. Large ignorance of racial differences and subsequent inequality is leading to a much wider discussion and need for reservations.

These issues are not new to US but have been ignored by economists for a long time.  The 2008 crisis and its eventual fallouts are leading all these buried issues to come back.

An undergraduate at Brown University in the 1970s, William Darity, Jr. expected to learn the reasons behind the inequality he’d seen all around him growing up in the Middle East and North Carolina. He realized pretty quickly that economists were not going to be much help.

Darity, the son of North Carolinians, spent his first eight years in Lebanon and Egypt while his father worked for the World Health Organization, then lived until the age of twelve in Chapel Hill, North Carolina. During the Jim Crow era, he visited his grandmother in a town where a railroad track divided the city into black and white sections, marking two separate economic worlds.

At Brown, Darity was disappointed by how his teachers explained why some people reap the benefits in a society and some don’t. Most taught that some individuals and groups grew more prosperous than others because of differences in education — what economists refer to as “human capital.” Labor economists tended to say that educational differences meant that some people were more productive than others, which explained why some flourished and others languished in the long run. They believed that competitive markets would ensure that everybody ended up earning according to what they produced. Those with higher earnings were able to save more, and so they accumulated more wealth over the course of their lifetime.

Darity wondered, then, why disparities persist, even when markets are competitive. Black Americans, for example, are paid less than their white counterparts at every level of education.Motivated by what he describes as youthful hubris, Darity got a Ph.D. in economics and set out to change the way economists deal with these issues.

This is so so similar to India.

The solutions too. They recommend jobs reservations!


Darity is unimpressed.

“If you buy the black dysfunction story, then the key is for young black men to pull up their pants or the equivalent,” he says. “But that’s a very different policy from saying, well, we should assure all Americans a human right to work. Or even if we don’t talk about an employment guarantee, then at least the basic income guarantee.”

“If we’re concerned about black-white disparities specifically and we want to have a race-specific policy, then I think we have to start talking about a program of reparations [for slavery].” (Darity and his wife, Kirsten Mullen, are currently completing a book that details how a reparations program might be executed, due to hit the shelves by mid-2017).

“If we are not willing to pursue race-specific policies,” Darity argues, “then we need universal programs that are race-conscious in the sense that they will disproportionately benefit the most disadvantaged groups even though they are programs that everyone is eligible for.” One such program would be a Federal job guarantee.

INET is even holding a conference looking at reasons for decline of Detroit which is linked to all these differences:

The racism of the prevailing political order was baked into the economics profession from its inception. Race is a social construct rather than a scientific concept. But that construct expresses a power relationship with profound consequences for the lives of millions of Americans, black, brown and white.

Detroit was the first major American city to fall victim to badly-managed globalization, but it won’t be the last. Race, particularly focused on the failings of African-American administration in the City of Detroit, was used as a mask to avoid the real failures of the American economy and governance. The violence and velocity of Detroit’s decline frightens everyone who holds a belief in the American Dream. Attempts to blame racial tension for the problems of Detroit is a mask and an anesthetic.  The nation’s failure to manage the city’s de-industrialization left tens of thousands of working-class Americans to fend for themselves on an increasingly bleak economic landscape, deepening political polarization. Racial animosity did not cause these problems, but it was certainly inflamed by them. 

Understanding the causes of Detroit’s decline — and potential pathways to renewal — is a critical challenge facing policy makers, and the economists who advise them.

Our conference on “Detroit’s Tomorrows and Tomorrow’s Detroits”, will investigate how a clear-eyed perspective on new methods of healing of racial polarization can contribute to the revitalization of this great city, and also lend insight to the challenges facing myriad other multi-ethnic cities in America and around the world facing the stress of economic adjustment in the era of globalization.


All such solutions for India have obviously invited mock from media and experts. We have long been sold on the idea of meritocracy as “it happens in US”. Now with US talking about all these matters as well, what will we say?

Renting a tractor the ola/uber way…

October 20, 2016

How lessons are transplanted from one industry to the other.

This bit is really interesting (HT: CB Blog). Mahindras have launched an app called trringo. The small farmers can just swipe and call a tractor. Just like we do for taxis using ola/uber:

Hailing a ride with your smartphone? That’s old news — ask any Uber, Lyft or Careem customer.

But how about hailing a tractor?

Just as urbanites may find it impractical to own a car but still need a ride once in a while, so, too, in the Indian countryside: To get the most from their land, small-scale farmers may need tractors and other machines from time to time, but they may not be able to afford their own.

Renting can be the answer, but the way it was done in India before was not very appealing to farmers. The process was usually informal and local, run by equipment owners who could be capricious or discriminatory, and prices tended to surge at the times of year every farmer in the area would be doing the same job and need the same equipment.

Mahindra & Mahindra, a major Indian vehicle manufacturer, thought there had to be a better way.

“One of the things that struck us was the toll it took on the self-esteem of the farmer,” said Rajesh Jejurikar, chief executive of the company’s farm-equipment division. “It was, literally, like having to beg for it. He didn’t feel like it was his right.”

So the company came up with a smartphone app, Trringo, which it rolled out in September in the state of Karnataka and will soon be available in other agrarian states like Gujarat, Madhya Pradesh, Maharashtra and Rajasthan.

Right now, a farmer can use the app to specify what is needed and when, and the company will send the requested tractor and a driver from one of about 20 hubs across Karnataka. The machine might belong to Trringo or to a private owner using the service to book rentals.

There is one snag: By recent estimates, only about 9 percent of rural India has mobile internet access. So the company has also set up call centers for farmers to arrange rentals by telephone.

Will be interesting to see how this experiment fares…

How does Geography shape and redefine society: Case of Rajasthan

October 20, 2016

Thingnam Sanjeev of National Archives of India has written a book review of this book by Yamuna Sunny. The book is called Sprout: A Social Geography of Rajasthan and looks like quite a read.

Sanjeev says:

The book is groundbreaking in terms of its presentation, the way it illuminates ideas and events with the clarity of a schoolbook. By using graphics, illustrations, pictorial maps and dialogues, it opens up a new way of approaching and understanding geography which ties up with Sunny’s claim of building on “the informal spaces of reading that should be available to the people” (in acknowledgement). The book is thus heavily driven and informed by a sense of social justice, and is indeed, a pioneering work of its kind on Rajasthan in particular, and geographical studies in India at large. Deviating from the general trend of geographical reading with its focus on the physical landscape, Sunny tries to show how the processes of production and distribution of a region determine the social formations.

The book provides us a window to critically examine the various social challenges that retrograde and divide the people of Rajasthan. It argues that popular knowledge on geography is generally confined to “the encyclopedic form” and attempts to reinvent and reinterpret new perspectives on geography. By using social imagery to explain various modes of life of Rajasthani society, Sunny shows how geography becomes the site where human groups interact with nature to produce goods. It is the unequal nature of this interaction that has produced the social categories of class, caste and gender. She has captured local cultural perspectives through the references to oral traditions, ancient texts, folklores, plays, folksongs and food culture of Rajasthan. How the Rajasthanis as a community viewed their own geography and their responses to the changing spatial relationships have also been explained. The book constitutes a relentless interrogation into how the social geography of Rajasthani society has been governed by the caste system and how it is this very system that has denied the underprivileged class/caste like Dalits free access to public spaces.

How you dislike Geography and History throughout school. This is only to figure later they are perhaps the most important and relevant subjects for the rest of your life.

Fed’s rising focus on racial diversity and will it be reduced to an employment targeting central bank?

October 20, 2016

One has been so bored of reading FOMC statements that they are almost being ignored. The usual thing about inflation and unemployment is so much an overkill.

But Conor Sen points to this interesting new development. Fed is increasingly concerned about racial diversity in employment and reporting them as well. These are signs that Fed is going to be a more diverse place for employment as well:

The Federal Reserve gave two indications last week that one of its next structural pushes will be toward incorporating more diversity into how it conducts its business. For a variety of reasons, this evolution is likely to lead to a monetary policy with a more dovish bias than the institution has had in the past.

The first sign came in the release of the minutes from the September Fed meeting. For the third meeting in a row, the Fed commented on racial unemployment disparities, pointing out that “the unemployment rates for African Americans and Hispanics remained above the rate for whites.” The Fed also noted that for ages 25 to 64, the employment-to-population ratio was higher for whites than for blacks and Hispanics.

The second sign came in comments made by Minneapolis Fed President Neel Kashkari. “We cannot have confidence we are achieving maximum employment if we don’t understand what’s happening beneath the surface. … Understanding the composition of maximum employment is actually very important to us achieving the mandate that Congress has given us,” he said. Kashkari, whose parents immigrated to the U.S. from India, has previously said he will spend a day in the life of a struggling black family in order to better understand that experience.

This incorporation of demographic data in policy making isn’t the only way the Fed is looking to account for diversity. The Fed has increasingly been criticized by congressional Democrats for a lack of diversity on its staff. None of the Fed’s 12 regional branches has ever been led by a black or Hispanic president. Fed Chair Janet Yellen has pledged to increase diversity among the Fed’s ranks as it looks for a new Atlanta Fed president. With Louisiana, Mississippi, Alabama and Georgia, the Atlanta Fed branch includes four of the six states with the highest proportion of blacks in the country.


In the end, he says Fed is likely to look more at employment diversity than inflation as latter is hardly a concern now:

The future looks to be one with a more diverse Fed concerned more with achieving full employment in a variety of ways and less on elevated inflation, a focus that increasingly appears to be a relic of history.

This will be quite something if it happens.

And here in India, our central bank does not even think of regional representation in its overall policies. Though, in terms of employment Indian central bank could be more diversely employed given India’s affirmative policies. But the overall utility of this better representation can still be questioned. Does it really help address the wide regional and community differences in policies? On the face of it, it atleast does not seem to be the case..

250 years of the bond-equity correlation in UK – from positive to negative

October 20, 2016

The word correlation seems to have magical powers till you enter a statistics class. The class rubbishes the claim “correlation implies causation” and with it dies all the magic associated with the word. So whenever you read the word correlation, your reactions are mixed.

This post by Matt Roberts Sklar of BoE Blog Bank Underground shows 250 years of correlation between bonds and equities.  Interestingly, the correlation was positive till 1990s and has been negative ever since:

For most of the 18th-20th centuries, government bonds usually behaved like a risky asset. When equity prices fell, bond yields rose, i.e.  bond and equity returns were positively correlated (bond prices move inversely to yields). But since the mid-2000s, bond and equity returns have been negatively correlated, i.e. bonds became a hedge for risk. Before this, the last time this correlation was near zero for a prolonged period was the long depression in the late 19th century.

Bond-equity correlation

Source: Thomas and Dimsdale (2016) and author calculations.
Line shows ten year trailing correlation of monthly returns.

The change in the bond-equity correlation since the mid-2000s partly reflects investors being less worried about inflation risks. As well as demand-type shocks being more prevalent than supply-type shocks, the introduction of credible inflation targeting has helped anchor inflation expectations and reduced the likelihood of high inflation risks. Investors may also have become more focussed on bad states of the world.

At the same time, there has been a structural increase in demand for ‘safe assets’, with more investors demanding safe government bonds for reasons unrelated to their expected cashflows. This has been exacerbated during and since the financial crisis, with deterioration in risk sentiment leading to episodic ‘flight to safety’.  And the addition of QE and forward guidance to the monetary policy toolbox may mean long-term bonds react differently to previously.

The long historical perspective is interesting.

We usually think of stock and bond prices correlations like this. Say inflation goes up. Markets then expect central bank to increase rates and as a result bond yields go up and prices fall. In equity markets, the expectation is that valuation of firms will be lower in future down due to higher interest rates. So, the equity prices also decline. Thus, we see a positive correlation in the two assets.

But this monetary policy thing is recent development in 250 year history even if central banks are not. After all BoE came up in 1694, much before this data which is from 1750s. So to see this positive correlation even back in 1750s is interesting. Even more as during those times inflation was relatively stable due to commodity/gold standard. Prices hardly changed and inflation was hardly a risk. The shocks then mist be more around due to crop failures, sudden  rise in price of gold/silver , banking panics etc.

So say there is a banking panic this would have led both bond and stock investors shunning both and prices declining.

I would imagine this correlation has changed mainly due to increased central bank adventurism. In case of a shock people know central banks will infuse liquidity mainly via buying more bonds. Thus bonds are never really out of favor and only equities suffer.

There is a lot of interesting stuff in this one graph..


Learning basic finance from Norway’s Wealth Fund

October 20, 2016

Espen Henriksen and Knut Anton Mork write about a committee report (headed by Prof Mork himself) to look at portfolio of Norway’s Sovereign Wealth Fund. It has some useful finance lessons to offer:

 Index funds whether explicitly or implicitly seem to get better of the active ones..

City Union Bank – A good buy despite 112 years of existence!

October 19, 2016

Radhika Merwin of Hindu Businessline says City Union Bank is a good stock buy amidst the gloomy Indian banking sector.

Read the rest of this entry »

Iceland Today, the US Tomorrow?

October 19, 2016

One would have least expected even during the deepest crisis moment during 2008 crisis that soon people will compare US to countries least expected.

Ron Paul leaves Fed for a moment and takes a deeper dig at the US as a whole. Both countries are using departure tax to shore govt revenues:

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Why Indian States will give way to megaregions? (But is it anything new?)

October 19, 2016

Ashok Malik of TOI has an interesting piece. He says States as a way of political and economic organisation is passe.

India is going to be run by three megaregions in future:

As units of political and economic reckoning, states have come into their own and two recent but different episodes have emphasised this. The passing of the Goods and Services Tax (GST) constitutional amendment and the creation of the GST Council gives states greater authority in fiscal policy than before. On the other hand, the Cauvery dispute between Karnataka and Tamil Nadu has made apparent that strongly regional politics sometimes renders compromise difficult.

Nevertheless, whether as a political challenge or an economic trigger, the salience and empowerment of states is set to rise. There is hope that a sense of competition will get states to push each other in attracting investment and business opportunities, incubating manufacturing and innovation, and growing the overall Indian economy. India is making up for lost time. It is devolving powers to states and provinces in the manner China did in the late 1970s and 1980s, a decade in which Indira Gandhi did everything that was possibly wrong.

Having said that, is a template for the 1980s or 1990s true for the 2020s? Are states already yesterday’s story, and are tomorrow’s units of economic reckoning clusters and megaregions that will inevitably run across state boundaries? Consider some numbers. India’s GDP is today valued at $2 trillion. Amitabh Kant, chief executive of Niti Aayog, says if all goes well it could touch $10 trillion by 2032. A shorter-term assessment would have it reaching $5 trillion in the next decade, by 2025-26.

How will this $5 trillion GDP be distributed? About two-thirds of it will be located in three megaregions. First, the National Capital Region, comprising Delhi, Gurgaon and Noida, but frankly stretching to a variety of other locations: from Jaipur-Ajmer to Meerut to Gwalior.

Second, there is the Mumbai-Pune-Thane belt, extending by way of the National Highway to Ahmedabad and constituting the southern end of the Delhi-Mumbai Industrial Corridor.

Third, there is the 350 km stretch from Chennai to Bengaluru. Linking two states currently divided by the waters of the Cauvery, this stretch is being developed, with Japanese support, as an industrial corridor driven by technology, innovation and high-end, precision manufacture.

It is a reasonable bet, borne out by statistical modelling, that in 10 years each of these three megaregions will individually have a $1 trillion GDP.

He then points how economic megaregions are present in advanced countries as well. Though the example is only one from US but we do get to read such cases in Germany etc as well. Even if we continue with the States, they will just be obsolete:

Economic megaregions exist in every major country. In the American Northeast, for example, the Boston-Washington, DC, corridor (running though New York and Philadelphia) has a GDP about as large as Germany’s. A megaregion is recognition of the fact that business ecosystems and complementarities cannot be curbed by state boundaries and will tend to overwrite political maps. That’s why states as a category are becoming obsolete. India’s future for much of the coming 25 years at least will be shaped in its three emergent megaregions.

This is all fine and could easily happen as well.

The thing is it is hardly anything new. This organisation and reorganisation business keeps happening as we move.

The interesting thing though is how little things have really changed. We have had two of these regions – Bombay and Madras – as the key megaregions during British time as well. Instead of Calcutta which was the political and commercial capital during British time, we have Delhi this time. Post State reorganisation in 1956, we thought differently and made these megaregions part of the States.

But this reorganisation could not really change the fundamental aspects. Their geographies had historically earmarked them for growth and development. It is interesting and important they have continued to remain relevant despite so many years.

What would have been more interesting is emergence of newer megaregions..

Mark Carney: Britain’s celebrity central banker

October 19, 2016

George Pickering student of economic history at the LSE and Mises University has an interesting piece. He talks about Mark Carney who has emerged as a big celebrity central banker:

An awed hush descended over the crowd, as the most powerful man in the British economy prepared to give his response. Sitting at the front of the room, Bank of England governor Mark Carney surveyed his audience, paused to consider the question for a moment, and then finally decided on his answer: “Pizza.”

The event in question took place last month, when Mr. Carney visited Whitley Academy in Coventry, a small provincial city in the English midlands, where he was questioned by a group of 12–18 year old pupils on everything from his favourite kinds of food (pizza, for the record) and chocolate, to his favourite television programmes, to whether he preferred dogs or cats. The event was part of the BBC’s “School Report” initiative, which aims to give young people a taste of what it’s like to work for Britain’s state-sponsored news and entertainment monolith. As well as Mr. Carney, BBC School Report has also allowed pupils to meet with celebrities such as Angelina Jolie. But even in such illustrious company, the pupils’ meeting with the man in charge of the world’s oldest central bank left them impressed with how “informal” and even “cool” he was.

They aren’t alone. Ever since he was appointed to the position in 2013, the personality and antics of the UK’s monetary policy czar have delighted and captivated the press. In the eyes of the British public, everything from his square jaw to the accent stemming from his far-off and exotic homeland of Canada, makes Mr. Carney appear closer to some sort of Hollywood celebrity than to the technocratic coterie of crumpled grey suits who preceded him in the post. Over the past year in particular, Mr. Carney has happily cultivated for himself a degree of national visibility from which many of his predecessors would have shied, even when the media’s adulation of the BoE governor seems to centre as much around personality as it does around policy. After he cut interest rates to their lowest level in history this summer, for example, the media were delighted to photograph him conspicuously attending a music festival just days later, replete with brightly coloured polo shirt and a “glitter tattoo” on his face. In the immediate aftermath of Britain’s vote to leave the European Union, which Carney loudly proclaimed to be the “toughest day” he’s ever faced as BoE governor, he was nevertheless sure to be photographed chatting with famous actors at Wimbledon. London’s Evening Standard even went so far as to call him “the biggest babe in banking,” on account of his “George Clooney good looks.”

As absurd and amusing as this all may be, it nevertheless represents a development which could provide clues to what the future of the British political landscape might look like. When placed in the context of the disarray and chaos engulfing Britain’s political system at present, Mark Carney’s self-conscious ascent into the elite club of “celebrity” central bankers, could have more to it than first meets the eye.

Ironically, Post Brexit it is these starry qualities which are keeping Britain at bay. But for how long will it last?

It is interesting how the fortunes of the two central banks – England and India- intertwined in 2013. The same piece could easily have been written for  India as well. I mean the Indian media reporting fawning was as atrocious and fawning as in British lands. Just that India has thankfully escaped but the torture and entertainment  continues even now..

Big data in 19th century Ireland (Why is India missed each time??)

October 18, 2016

A terrific post by Prof. Cóilín Parsons who is a Professor of English at Georgetown University, in Washington, DC.

She points how big data is hardly a 21st century thing. It actually can be traced to 19th century when British decided to make Gazetteers documenting small details about parishes in Ireland.

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Understanding moral repugnance: The case of the US market for kidney transplantation

October 18, 2016

Julio J. Elias, Nicola Lacetera, Mario Macis have an interesting paper:

….to accept a system based on private transactions, the median respondent would require about a 30 percentage point increase in supply, corresponding to 10,000 extra kidneys procured (which would reduce the shortage by more than 50%), and $1.26 billion in savings for taxpayers. This difference in the estimated trade-offs appears to derive from the fact that the public agency paid-donor system was considered less repugnant than the private transactions system along all of the morality features that we included. In particular, participants rated the public agency system as being equally ‘fair to the patients’ as the unpaid donor system (these two systems allocated organs to patients based on the same priority rules), whereas private transactions (in which the allocation is purely market-based) were considered highly unfair.
The issue of a kidney market is a very sensitive one and needs to be dealt with a lot of patience and humility.

Alvin Roth stresses that “we need to understand better and engage more with the phenomenon of ‘repugnant transactions’, which often serves as an important constraint on markets and market design.”[1] The prohibition on payments to kidney donors is one important example of this phenomenon. Our research suggests that individual choices based on repugnance considerations respond in a predictable ways to efficiency information, but also that ethical views play a crucial role in these preferences.

Supplying evidence and promoting studies on such sensitive topics might therefore lead to greater awareness and improved policy design based on the actual preferences of a population. In the case of introducing regulated payments for organ donors and their families in particular, the evidence is particularly strong that informing society about the potential benefits of economic incentives does impact the acceptability of this transaction.

Because individual preferences appear to depend on expected efficiency in addition to ethical considerations, pilot trials testing the outcomes of different arrangements may enhance the ability of a population to determine the preferred organ procurement and allocation system.

This topic of kidneys is really intriguing for this blog.

This post – Regulated market for kidneys in Iran – written in July 2010 continues to get comments till date. There is hardly a week when someone does not post a comment which is related to either demand or supply of kidneys. It currently says 60 responses but is much more as many have been deleted given the randomness of the comment.

So it seems this is one big missing market (if one can call it that) which is affecting a lot of people. How to make it work keeping sensibilities in mind is obviously a big issue to tackle..

The future of web design is hidden in the history of architecture

October 18, 2016

Superb picturesque post by Mike Sall.

The history of Western architecture can teach us a lot about the evolution of web design. As forms of art, both are defined by several factors:

  1. They serve as places where other people go.
  2. They’re engineered to do this pragmatic job.
  3. The evolution of technology limits this engineering.
  4. And yet, they’re definitely still art.

Within these constraints, both have progressed along remarkably similar paths, building on the past and reacting to it in similar ways. If you want to know where web design is heading, just look at where architecture has already gone.

History of architecture has so much to offer…

How many payments banks will come up finally?

October 17, 2016

The story of payment banks has been off the radar for a while. After initial euphoria over their being seen as game changers, there was sudden shock when three of them opted even before starting their business. One was expecting more to drop out but were perhaps scared of the regulator which wished to penalise the future drop outs.

In a new article, banking journo Tamal Bandopadhyay asks the question –  How many payments banks will come up finally? He says even if the remaining come up, they will struggle to make profits:

Of the eight that are putting the final touches on their business plans, four are in the telecom space—Airtel M Commerce Services Ltd (partnering Kotak Mahindra Bank), Reliance Industries Ltd (Reliance Jio Infocomm Ltd is partnering State Bank of India), Vodafone m-pesa Ltd and Idea Cellular Ltd. In July, Bharti Airtel Ltd had close to 257 million subscribers, Vodafone India 200 million, Idea 176.5 million and a 9 October statement said Reliance Jio had managed to get 16 million customers since its launch the previous month. They have a captive subscriber base and, if nothing else, the payments bank activities will help them create stickiness for their telecom customers. For others, it will be a difficult task—setting up a payments bank and making money, even after five years.

It is amazing how little thought has gone into the business model and profitability angle of these banks. The regulator expressing its interest is one thing as it does not worry about profits really. But to see so many private sector stalwarts make a beeline for the licences makes one wonder on what was really going on.

Most were thinking that it would lead to a their backdoor entry into banking. But even for that to happen they would have to cross this first hurdle of making their payment bank viable.

One does not even know this aura of owning a bank. Unless one is thinking that he/she could siphon off the bank funds to own business, even normal  banking is a very tough business. Even siphoning funds to one’s own business would be tough given the constant sword of the regulator on its head.

But both media and our banking experts think differently. Anything  to do with private banking is seen as this game changer without really looking at the details..

Future of Library in next 100 years: A novel initiative to keep books in demand

October 17, 2016

Katie Bennett of Oxford University Press has a post on a very interesting initiative taking place in Oslo, Norway.

The idea is to make some efforts to ensure both libraries and books remain relevant even 100 years later:

I want to live to be 100 years old. Yes, that is a bold statement, and I’ll admit this goal may be a bit unrealistic and potentially impossible, but my curiosity pushes me to beat the laws of nature. As a 22-year-old avid reader working for a publishing company, I can’t help but wonder: what will be the future of the printed book? Since the creation of the world wide web by Tim Burners-Lee in 1989 and it’s continual expansion since then, this question has haunted the publishing industry, raising profound questions about the state of the industry and the printed book. After the debut of the Amazon Kindle and the Barnes & Noble Nook, it seemed as if the days of print materials were numbered. Katie Paterson, founder of the Future Library of Norwa project, doesn’t seem to think so, and she’s got a plan to ensure their existence.

A renowned Scottish artist, Paterson is known for her grand-scale artistic ideas and endeavors. On 12 June 12 2014, Paterson began a century-long project as her way of preserving the future of the library and the printed book. Over 1,000 trees have been planted in the Nordmarka forest just outside of Oslo, Norway for the Future Library, called Framtidsbiblioteket in Swedish. These trees, only now just saplings, will grow to full maturity by 2114, ready to be harvested to print the most mysterious literary anthology ever compiled.

Each year, one prominent author submits an original manuscript of his or her writing—be it a poem, short story, novel, play, anything—and seals it in a box. For the next 100 years, that box will be kept in trust, unpublished, until 2114 when the future project leaders will publish the set of works submitted into printed anthologies available to the public. The New Deichmanske Public Library in Bjørvika, Oslo, opens in 2019 and will house the manuscripts in a specially designed room, lined with wood from the forest. Only the authors’ names and titles of their works will be displayed.

For the next 98 years, no one—not even Katie Paterson herself—will be able to read these submissions, and the authors of these works will most likely never experience the public’s reaction to their writings. In fact, most everyone who is currently working on this project with Paterson will never see the results of their efforts, and can only hope that the people to whom they entrust this project will continue their legacy in the ways directed. With hope, their grandchildren might be old enough to purchase a volume of the anthology, but even that’s no guarantee. In a world so consumed with providing a better existence for future generations, how selfless of an endeavor to work on a project the creator will knowingly never be able to enjoy.

Some authors have already begun to submit their anthologies. One can already buy a right to ensure delivery of the anthology when it opens to public in 2114.

A short history of cricket in Hindi cinema

October 17, 2016

There are three things which Indians are usually mad about- politics, cricket and movies.

Baradwaj Rangan a film critic and an associate editor with the Hindu in this piece mixes cricket with movies.

He tell you about several Hindi films which have had cricket as a plot. There is also a review of cricketers who tried the celluloid. He actually covers a lot of ground in this piece and hardly misses any movies:

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