The Indian Economy Blog

Archive for May, 2007

The Indian Education System — Part 5

Thursday, May 31st, 2007

One underhanded way to scare a neoclassical economist out of his wits is to creep up on him and shout “monopoly power.” Economists regard monopolies with the same mixture of dread, contempt and fascination as biologists regard cancer. They recognize the awesome virulent power of monopolies to wreak havoc on their world of mutually beneficial [...]

The Indian Education System — Part 4

Wednesday, May 30th, 2007

The absence of universal basic literacy and education is a constraint on present economic performance and future growth. Doubtless, education is costly but the opportunity cost of not having an education is even higher. The old adage about a stitch in time saving nine holds with special force in the case of basic literacy. Here’s [...]

Protect The Chain, But At What Cost?

Tuesday, May 29th, 2007

Recently the West Bengal West Bengal State Marketing Board chairman Naren Chatterjee had to say this about Metro’s entry into the state, “have heard that they will sell directly to the trade then what will happen to the people in the chain, they will become jobless. We will not allow any one who disturbs the [...]

The Indian Education System — Part 3

Tuesday, May 29th, 2007

The education system is embedded in the bigger socio-political order of the economy. To a large degree, the larger system dictates the characteristics of its subsystems. In the broadest terms, the government of India is an extractive and exploitative system created specifically for that purpose during the nearly one hundred years of its existence as [...]

The Indian Education System — Part 2

Monday, May 28th, 2007

Education matters immensely when it comes to the health of an economy. There is a positive correlation between years of schooling and the GDP per capita. Let’s look at the numbers that are indicative of the generalization. In 2001, “school-life expectancy” and the ppp GDP per capita for Ethiopia were (4.3 years, and $675); for [...]

Make No Little Plans

Saturday, May 26th, 2007

Think Big There is something in the nature of the world that it is sometimes paradoxically more difficult to make small changes than to make big ones. Logically consistent big changes are more likely to succeed because of the interconnectedness of the world. At times, big changes are forced on the system from external shocks [...]

We Need You!

Thursday, May 24th, 2007

The Indian Economy Blog is looking for new contributors IEB has become the most popular blog on Indian economic issues in the short time it’s been around, and our posts manage to find their way to all sorts of interesting places. Not bad for an all-volunteer effort, even if we say so ourselves. Currently, we’re [...]

The Future Past

Saturday, May 19th, 2007

Flashback The year is 2020. For nearly 12 years, India has seen an average annual GDP growth rate of over 12 percent more than quadrupling the per capita GDP from US$500 in 2008 to $2000, placing India in the league of middle-income economies. Stark poverty is a thing of the past. In much less than [...]

What Gives in the Mobile Space?

Saturday, May 19th, 2007

This news story has got buried, for some reason, with few people I know being aware of it. According to Business Standard, the net addition to the GSM subscriber base has dropped from 6.13 million subscribers in March to 4.13 million subs in April. What gives? 1. As the story suggests, there has been an [...]

Pune Deci

Monday, May 14th, 2007

“Pune DeCi” is a designer city started in 2010 and completed by 2016. Just 30 kilometers outside the old city of Pune, about 100 square kilometers of land was acquired. The government of Maharashtra, the state where Pune is located, was a partner in the “Pune DeCi Development Authority” and had a stake of 20 [...]

Land Development

Saturday, May 12th, 2007

When I first moved to the US, I was struck by the phenomenon of shopping malls located far away from the city, about an hour along some highway. Land, it occurred to me, was cheap outside the city and what they did was to build these huge malls that were in some sense islands of [...]

Alan Blinder on Off-shoring

Wednesday, May 9th, 2007

Alan Blinder claims that “Free Trade’s Great, but Offshoring Rattles Me” in a article. He has dug up an old 2004 US election issue. He begins with I’m a free trader down to my toes. Always have been. Yet lately, I’m being treated as a heretic by many of my fellow economists. Why? Because [...]

The Micro-market For Textbooks … thinking aloud!

Tuesday, May 8th, 2007

Incentives are greatly aligned when the Beneficiary is also the Payer and the Chooser of a product. The greater the social distance between the three entities of the P-C-B, the weaker is the alignment of incentives to have effective markets. The best case is that of private spending for a car where the P-C-B entities [...]

Coordination of the Factors

Tuesday, May 8th, 2007

Cities are engines of growth because they “manufacture” wealth. That is why rich economies are predominantly urban, and those economies that are largely rural are poor. Therefore the transition from a poor economy to a rich one depends on the transition of the majority of the population from being rural to urban. The scale and [...]

The Oil Distribution Conundrum

Tuesday, May 8th, 2007

During a guest lecture at IIM Bangalore a couple of years back, Arun Shourie had asked a rhetorical question as to why oil distribution should be termed “strategic” and hence the oil PSUs should be tightly in control of the government. He didn’t pause to answer it, for maybe he knew that a majority already [...]

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