The Unassuming Economist

In a recent piece (2021), researchers at McKinsey & Company discuss the merits of a data-based approach to food security by tailoring nutritional offerings, and how building out partner networks can help payers realize the potential of food-support programs. They elaborate upon some of the recently adopted nutrition benefit programs by payers in the USA that have helped the society overcome major medical bumps, helped payers retain members and reduce costs.

The article then discusses some of the barriers to scaling up adoption of such nutritional benefit programs, including issues the need for accurate need assessment, designing proper interventions, forging stakeholder partnerships, and measuring and precise reporting of outcomes of the rolled out intervention properly to ensure ease of replication of a similar program elsewhere. On similar lines, it provides insights on how policymakers can overcome each of these barriers for improving health outcomes of the vulnerable communities, besides realizing tremendous social benefit in the form of reduced care costs.

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Max Walter, the executive director of Centre for Development Alternatives (a Uganda based independent think tank) writes for the Brookings Institution about the revival of industrial policy for pushing growth in Africa. Governments across the continent are using industrial policy tools to push for industrialization through agro-processing, labour-intensive light manufacturing, natural resource extraction and value addition, some knowledge-intensive manufacturing, and “industries without smokestacks” such as high-value agriculture and tradable services.

The article explores reasons which may have driven this revival and then moves on to explain some notable examples. From Uganda’s National Development Plan (2020) which focuses on the use of several industrial policy tools for bolstering supply chains of cocoa production, to Morocco and South Africa’s policies to upgrade automobile manufacturing industries- examples are aplenty.

The article also delves into the importance of failures of such policies for evidence-based strategic policymaking.

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Economists Christian Gayer and Andreas Reuter of the European Commission (EC) and Fiona Morice of the French National Institute of Statistics and Economic Studies write about the EC’s new index of uncertainty in a recent column for the VoxEU blog.

For the lack of a better indicator, economists have often resorted to measuring uncertainty using proxies like deviation of agents’ views on economic outlooks or forecast errors. However, this new index aims to study the evolution of uncertainty in response to the Covid-19 pandemic and related stringent restrictions based on the EU-wide Programme of Business and Consumer Surveys. It also compares the indicator to survey-based indicators of economic confidence, as well as to other existing uncertainty gauges, and offers a glimpse of the rich set of geographical, sectoral, and sub-sectoral breakdowns of the new data.

The column dives deeper into the levels of analysis possible using disaggregated data on various parameters that it presents, such as at the industrial and sub-sectoral level, for consumers grouped by several socio-economic categories etc., and then discusses some key insights.

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Discussions about welfare and development often revolve around the usage of income thresholds to analyze changes in living standards and the well-being of individuals. While many studies emphasize the growing gap between those falling under the upper and lower tails of the income distribution table, it is the middle that is often dismissed in such development stories, and perhaps wrongfully so.

In a recent column for the Brookings Institution (2021), economists Kimberly Blair Bloch and Luis F. Lopez-Calva bring this issue into the spotlight and discuss considering median, rather than the mean income, as an insightful estimate of the “middle”. Their findings highlight three major points- (a) the mean and median incomes have risen steadily over the years in all countries (2002-2019); (b) median income has grown more rapidly than mean income in all countries; (c) and, the ratio of mean to median income has fallen in all countries.

Thus, they observe that income distributions in all countries are gradually tending towards a more normal distribution than a positively skewed one, which has the very important policy implication that the “middle” class can simply not be ignored by policymakers any longer.

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Former chief economist of the World Bank and chief economic adviser to the Government of India, Dr. Kaushik Basu, wrote for a recent column at Project Syndicate about countries’ widely disparate experiences with inflation today.

“From the US and Brazil to Turkey and India, growing price pressures are leaving policymakers facing some difficult decisions. Unlike in many previous global inflationary episodes, what is remarkable this time is how different the cross-country experiences have been.“

He observes that the world’s recent collective brush with inflation today is very different from the past because even while recovery from Covid-19 led disruptions is a common feature of all economies, their diverse responses to the crisis have churned out diverse economic scenarios.

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