India: Backdoor Monetization

While reading Ms. Renu Kohli’s column in MINT yesterday, I was struck by the following sentences: Government market borrowings in 2011-12 have overshot projections; three auctions of sovereign paper have already devolved upon the central bank as the government’s borrowing began for the second half of the fiscal year this October; and long-term yields are […]

Economic Transition in Afghanistan: How to Soften a Hard Landing

The clock is ticking. Between now and 2014, upwards of 150,000 foreign troops and 30,000 contractors will start leaving Afghanistan. Donor aid is also declining. In the past year, the U.S. Agency for International Development (USAID) budget has been cut in half. In other words, the war economy is unraveling. While most of the $118 […]

Burying India

I have disagreed and continue to disagree with Surjit Bhalla on his monetary policy prescriptions for India. But, this piece of his in IE recently is a gem. It is a MUST-READ. There are three big corruption scams in India; well, there are several, but these three are likely the biggest. And coincidentally, all three […]

India: Linked or De-linked From the Global Economy?

With economic growth expected to continue at a reasonably good clip this year and next, it’s all too easy to think there’s not much to worry about. Even as Diwali celebrations begin across India, the outlook for the world economy is fairly uneven and uncertain. More worrisome than the subdued global growth outlook, risks are […]

India: Pegging Back

India’s growth forecast for 2011-12 has been cut to 8.2% by the Prime Minister’s Economic Advisory Council (EAC). The Council had also urged rapid action on the part of Government on various pending reforms. We all know the laundry list – land acquisition, multi-brand retail, Goods and Services Tax, Direct Tax Code reforms, etc., etc. […]

Growth-Inflation Trade-Off

While the focus in Asia in recent months has shifted to inflation, there is a debate in Bangladesh over the conflicting figures of GDP growth. According to the Bangladesh Bureau of Statistics (BBS), the economy is projected to grow 6.7%  in the fiscal year (FY) 2010-11. This provisional figure conflicts with other agencies that forecast […]

Pakistan’s Obsession

Pakistan is in an uproar over U.S. violations of Pakistani sovereignty. They are furious over the flight of the SEALs to Abbotabad for the Bin Laden raid and the continued U.S. missile attacks against militants in North Waziristan with inevitable civilian casualties. The U.S. is in an uproar over Pakistan’s shielding Bin Laden and other militants. U.S. Pakistan relations are at their lowest level ever. The U.S. has threatened to end more than $3 billion per year of military aid. The Pakistanis have threatened to end U.S. transit routes from Karachi through Pakistan to supply international forces in Afghanistan.

Not Pre-Ordained

I like Arvind Subramanian’s piece because it does not pretend that economics offers solutions to all problems in the world. He is also right to worry that corruption could stop India’s onward march. Part of the explanation for the seemingly big rise in corruption in India is that those who are engaging in it seem to think that the monies they steal would be mere drops in the ocean as the ocean itself would keep growing for the next 40 years! 

Poverty Economics

I have read the ‘Foreign Policy’ article that contained excerpts from the book by Abhijit Banerjee and Esther Duflo. It would not be fair to comment on their work without reading the book. But, one could be excused for walking away with the impression, on reading the above article, that the poor remain poor because they could not care less. 

Economic Freedom in the States of India

This blog post is joint work with Mana Shah.

What is economic freedom?

An index of economic freedom should measure the extent to which rightly acquired property is protected and individuals are able to engage in voluntary transactions. James Gwartney and Robert Lawson have proposed a definition where individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.

Measuring economic freedom across countries and time