The Unassuming Economist

From a paper by Debkumar Chakrabarti, Sankalpa Bhattacharjee, and Pradeepta Sethi:

“This paper undertakes a comprehensive review of some of the less-discussed factors that harbor the potential to explain the wide variations in structural transformation, especially amongst developing economies. We begin by critically reviewing the effects of income, relative price, and international trade, which are generally considered drivers of structural change, with special emphasis on developing economies. Subsequently, we bring to the forefront three comparatively less-discussed factors—income inequality, financial market imperfections, and government policy that can explain a large part of the divergences in the transformation patterns of developing economies. Underscoring the limitation of the conventional discourse that relates cross-country differences in structure in terms of cross-country differences in manufacturing, we emphasize the need for the theoretical discourse to move beyond the industry-centric approach to focus on the recent research that views the surge of services as an additional engine of growth and the possible avenues through which it can affect structural transformation.”

From a paper by Rui Wang, and Shanshan Yang:

“While the global economy is on a clear path to recovery, the issue of inequality persists, particularly within developing countries. Based on the panel data of 127 developing economies around the world from 2000 to 2021, this study employs the multi-period DID model to investigate the role of China’s foreign digital aid in influencing the level of income inequality in developing economies. The study finds that China’s foreign digital aid has significantly reduced income inequality among recipient economies. Further analysis shows that there is an intriguing correlation between digital aid modalities and its effectiveness of implementation. When China’s foreign digital aid is an OOF-like program, it can significantly improve income inequality in recipient economies, yet when it is an ODA-like program, it can increase income inequality. In addition, the effectiveness of aid is influenced by the income levels of the recipient economies. Digital aid proves to be more effective in nations with high to middle income economies in comparison to nations with low-income economies. Therefore, the acceptance of China’s digital aid has an important role to play in reducing the level of income inequality in developing economies that cannot be ignored.”

From The Tribune:

“The Centre of Development Policy and Management (CDPM), IIM Udaipur, in association with People Research in India’s Consumer Economy (PRICE), recently hosted a thought-provoking panel discussion on ‘How Inclusive is India’s Growth in the 21st Century? The Experience of the First Quarter’. The session featured prominent experts–Dr. Shamika Ravi (Member, Economic Advisory Council to the PM), Mr. Nikhil Ojha (Senior Partner, Bain & Company), and Prof. Dipankar Gupta (Indian Sociologist)–who examined India’s economic and social transformation over the past 25 years. The discussion was moderated by Prof. Saurabh Gupta, Co-Head, CDPM.

Dr. Shamika Ravi emphasised that India’s growth is not an inevitability but the result of well-targeted policies. While India has successfully reduced absolute poverty to below 3%, human development indicators still lag behind global standards. She highlighted the increasing role of women in the labour force, attributing it to focused policy interventions. However, she noted that industrialisation remains critical for job creation as the country moves toward an increasingly urban future.

Mr. Nikhil Ojha focused on India’s shifting income distribution, pointing out that the middle class has expanded significantly, driving consumption growth. However, he cautioned that FMCG revenue growth is lagging behind nominal GDP, raising concerns about whether economic policies are sufficiently addressing the needs of aspirational consumers. He also highlighted the urgent need to address regional disparities, particularly in job creation, to ensure balanced growth.”

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From Business Day:

“The Minister of Foreign Affairs, Amb. Yusuf Tuggar, has expressed Nigeria’s support for the G20’s push for inclusive growth.

Tuggar made this known in a statement on Thursday by Alkasim Abdulkadir, his Special Assistant on Media and Communications Strategy.

Speaking during the G20 Foreign Ministers’ Meeting in Johannesburg, South Africa, Tuggar called for urgent global reforms to promote economic equity, peace, and security.

He congratulated South Africa on assuming the G20 presidency, pledging Nigeria’s full support for its priorities, such as disaster resilience, debt sustainability, and just energy transition.

“The G20 must focus on harnessing critical minerals for inclusive growth, while tackling global conflicts and humanitarian crises,” he said.”

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From a paper by Christos A. Makridis and Saurabh Mishra:

“The share of artificial intelligence (AI) jobs in total job postings has increased from 0.20% to nearly 1% between 2010 and 2019, but there is significant heterogeneity across cities in the United States (US). Using new data on AI job postings across 343 US cities, combined with data on subjective well-being and economic activity, we uncover the central role that service-based cities play to translate the benefits of AI job growth to subjective well-being. We find that cities with higher growth in AI job postings witnessed higher economic growth. The relationship between AI job growth and economic growth is driven by cities that had a higher concentration of modern (or professional) services. AI job growth also leads to an increase in the state of well-being. The transmission channel of AI job growth to increased subjective well-being is explained by the positive relationship between AI jobs and economic growth. These results are consistent with models of structural transformation where technological change leads to improvements in well-being through improvements in economic activity. Our results suggest that AI-driven economic growth, while still in the early days, could also raise overall well-being and social welfare, especially when the pre-existing industrial structure had a higher concentration of modern (or professional) services.”