The Unassuming Economist

From a paper by Pilu Chandra Das, and Deb Kusum Das:

“Services have been the driver of India’s overall growth since the onset of economic reforms in India and particularly beginning the 2000s. However, India’s manufacturing sector continues to draw attention despite several decades of reforms covering industrial policies and trade liberalization. The government through its several initiatives—National Manufacturing Policy as well as ‘Make in India’ program—continues to drive the sectors role in the overall growth and development. The sector is targeted to contribute around 25% of GDP by 2025 as against its current 16% share. In the recent past, Indian manufacturing has attained a sharp rise in growth and this augurs well for a sector that has seen stagnancy in its share of GDP in the last several decades. The lack of jobs in organized manufacturing has so far failed India’s industrial objectives and add to that is the large number of people employed in informal manufacturing activities as well has remained a perennial challenge to development needs. The productivity performance of manufacturing industries has been well documented and continues to exhibit low productivity growth. A recent study by Das et al. (The World Economy: Growth or Stagnation? Cambridge University Press, Cambridge, pp. 199–233, 2016) however finds labour-intensive manufacturing outperforming non-labour-intensive goods during the period 2000–15 and this is important when we have evidence of declining labour intensity even in labour-intensive manufacturing (Sen and Das in Economic and Political Weekly 50(23):108–115, 2015). Several challenges remain if productivity is to be improved. Most critics would point to the labour market rigidities for the inefficiency in the manufacturing sector, but there remains several issues beyond simple labour market reforms that need to be addressed—particularly those related to skill formation and its impact of labour quality. The present study would cover the manufacturing industries for the period 2000–2015 in an attempt to understand the productivity dynamics in manufacturing sector and its relation to employment. Using a neoclassical growth accounting technique and the India KLEMS dataset, we would examine the manufacturing performance both at the aggregate-level as well as 13 disaggregated industries and present an industry-level perspective on manufacturing performance. The period of study would also take into account the several phases of the Indian economy including pre-global slowdown, slowdown and recovery phase. The study would address some of the possible determinants of manufacturing performance which need attention if the stagnancy of manufacturing share in overall GDP is to be reversed.”

From a paper by Amit Roy, Pu Chen, and Willi Semmler Sr:

“In European countries carbon pricing is often viewed as a primary strategy to combat climate change and climate risks by reducing carbon emissions and driving investment into cleaner energy sources. Decarbonization has also been suggested by directed technical change, which implements innovative renewable energy technology. We study the eectiveness of both policies for selected Northern EU countries. In a model-based investigation we rst compare optimizing and behavioral drivers of decarbonization with a focus on the two decarboniza-tion policies. Econometrically we employ Local Projection and the VAR method to explore the eects of both policies, carbon tax and directed technical change on GDP and emission reduction. Our results show that though both policies are needed signicant technology-oriented policy actions on the supply side of renewable energy appear to be required to accelerate the decarbonization of the economies. We want to thank Tato Khundadze for extensive research assistance. We also want to thank two reviewers of the article and the editors of the journal for extensive comments.”

From a paper by Haibo Li, Jiayin Sun, and Ningxin Qiu:

“Previous research shows that the impacts of inflation expectations on consumer behaviour are mixed. Using a survey of 2,500 Chinese households, this letter finds that rising inflation expectations increase the purchase intention of durable goods, such as housing and cars, while reducing the demand for easily substitutable goods, such as mobile phones. The effect exhibits significant heterogeneity across income and age groups: higher-income and younger consumers are more inclined to increase investment-oriented spending, while lower-income and older groups adopt more cautious consumption behaviours. These findings also highlight the heterogeneous effects of inflation expectations on consumer welfare across demographic characteristics.”

From a paper by Ernest Alang Wung, Joslanie Douanla Tameko, and Muhamadu Awal Kindzeka Wirajing:

“This study investigates the effect of external dependency on structural change in 54 African countries between 1990 and 2021. The Two-Step System Generalized Method of Moments strategy is adopted to control for potential endogeneity problems. Findings reveal that structural change in Africa is strongly impaired by the level of external dependency. This is since all proxies of external dependency are negatively and statistically significant with all structural change proxies. For instance, under agricultural productivity, external debts stocks (EDS) give an eigen value (β) of 0.879, standard coefficient (SC) = 0.162, and p = 0.000; for external debt services (DSED), β = 0.240, SC = −0.040, and p = 0.972; and for personal remittances received (PRR), we have β = 0.764, SC = −0.133, and p = 0.031. Depicting that, the more African countries rely on the external world for change, the less they realize this change. The results remain consistent after accounting for income differences by segmenting African countries into low- and middle-income groups. As suggestions to policymakers, for structural change to concretely take place in Africa, the rate of external dependence should be limited, and resources in Africa and local methods of growth should be used rather than copying from the Western world. Though the results are valid across income groups and Africa, the case of countries could be more significant.”

From a paper by Emiliano Brancaccio, Fabiana De Cristofaro, and Raffaele Giammetti:

“The so-called ‘IMF-OECD consensus’ suggests that labour market deregulations increase employment and reduce unemployment. This paper presents a meta-analysis of research on this topic based on MAER-NET guidelines. We examine the relation between Employment Protection Legislation indexes on one hand, and employment and unemployment on the other. Among 53 academic papers published between 1990 and 2019, only 28 per cent support the consensus view, while the remaining 72 per cent report results that are ambiguous (21 per cent) or contrary to the consensus (51 per cent). The decline in support for the consensus view is particularly evident in the last decade. Our results are independent of the citations of papers examined, the impact factor of journals and the techniques used. A FAT-PET meta-regression model confirms these outcomes.”