The Unassuming Economist

From a book chapter by Matthew Cole:

“We live in a world where services dominate employment and form an ever-greater share of GDP. What does the relative decline of manufacturing and the rise of services mean for the present and future of work? There is much debate regarding this question. Recent advances in ICT infrastructure, datafication and artificial intelligence have allowed for a degree of technological substitution in service work that was previously impossible. This chapter argues that recomposition of capital at both the national and global scales has reorganised production and expanded production networks to place certain services as a crucial engine of growth. It proceeds by introducing the concept of services in the classical political economy and labour process tradition. It then addresses one of the key debates around the nature of services under capitalism and deindustrialisation. The chapter concludes that how technological and institutional change will impact the future of work will ultimately depend on the balance of power between capital and labour.”

From a paper by Belen Chocobar, Peter Claeys, and Marcos Poplawski-Ribeiro:

“Macroeconomic theories attribute rigidities in expectations formation to two mechanisms: sticky or noisy information. Recent advances in testing time variations in forecast dispersion—using the fluctuation rationality test—allow detecting departures from forecaster rationality over time. Relating individual forecaster behavior to economic or political factors on a panel of budget balance forecasts from Consensus Economics, a large panel of individual expert forecasters in four major OECD countries between 1993 to 2023, we find evidence for forecaster behavior in line with noisy information. Traditional full-sample tests show that forecasters are not rational, but this is due to an overly pessimistic reaction to sudden big shifts, like the global financial crisis or the pandemic. In normal times, forecasters do systematically incorporate economic and political news in budget forecast revisions.”

From a paper by Bertrand Candelon and Francesco Roccazzella

“This paper evaluates the informative value of the ECB inflation forecasts vis-à-vis other institutional and model-based forecasts in the euro area using ex post optimal combinations of forecasts and nonnegative weights. From a methodological perspective, we adapt the corresponding forecast encompassing test to the constrained parameter space, showcasing its superior performance over traditional encompassing tests in both size and power properties. Empirically, the combining weights and the forecast encompassing test reveal that the ECB was the most informative forecaster of euro area inflation over the 2009–2021 period. This changed in 2022: The ECB lost its position as the most informative forecaster, and when using rolling windows to estimate the combining weights using a rolling window, we find an important decline in the ECB’s weight over time. This time dependency can be associated with the economic environment and, in particular, the level of uncertainty, the monetary policy, and the macro-financial conditions in which the ECB operates.”

From a paper by Claudio Borio:

“From its tentative beginnings, inflation targeting has spread to become the de facto global monetary standard. Historically, only the Gold Standard has had a longer lifespan. Inflation targeting has done its job: helping to hardwire a low-inflation regime, even in the face of the post-Covid inflation surge. But the journey has been far from easy. Inflation targeting had to contend with the rise of financial instability, most spectacularly in the form of the Great Financial Crisis. In the wake of that crisis, it struggled to push inflation back up to point targets, and it saw a historical erosion in the room for policy manoeuvre. This paper assesses these challenges and considers possible adjustments to the framework. These include more systematic consideration of the longer-term damage that financial factors can cause to the economy and of the importance of safety margins in the conduct of policy. And all this should be grounded on a clear recognition of what monetary policy can and cannot deliver.”

From a Keynote address by Mr Swaminathan J:

“Regional Director for Mumbai Regional Office, Shri Suman Ray; Regional Director for Nagpur Regional Office, Shri Sachin Shende; Chief General Manager, National Bank for Agriculture and Rural Development, Ms. Rashmi Darad; General Manager, Bank of Maharashtra and Convenor, SLBC Maharashtra, Shri R D Deshmukh; senior executives from banks, Lead District Managers (LDMs), Lead District Officers (LDOs) and my colleagues from Reserve Bank of India, present here.

Good morning, it is my proud privilege today to be addressing this Conference for Lead District Managers of Maharashtra.

Being here near Nagpur and that, too, for a Conference of the LDMs, it would be amiss of me if I am not reminded of Shri Baba Amte, whose Ashram is within a few kilometres. As you all would be aware he was one of the proponents of rural economy-driven growth. There is this one part of a quote attributed to him, which says, “A balanced economic system is one which provides sufficiency for all and superfluity for some-“

When you parse the quote, you will realise that the LDMs are facilitating the sufficiency of the rural economy. And balancing the economy by facilitating sufficiency for the rural economy rings as much true today as it must have been when it was said. When you look at the results of the Economic Survey, 2023-24, it is observed that Indian agriculture sector provides livelihood support to about 42.3 per cent of the population and has a share of 18.2 per cent in the country’s GDP at current prices.

So, with the rural economy thriving, the role of Lead Banks assumes a renewed emphasis. In fact, the aspirational goals that RBI has set for RBI@100 in a Multi-Year Time Frame, reiterates its focus on ‘Accessibility, Availability and Quality of financial services to all sections of the society’.

It is this underlying principle that had conceptualised the Lead Bank Scheme (LBS) in 1969. The Lead Bank is expected to assume a leadership role for coordinating the efforts of the credit institutions and the Government. And within this leadership role, the role of LDMs cannot be overstated.

As key pillars of the LBS framework, you hold the responsibility of extending banking services and credit to underserved regions, facilitating economic advancement, the results of which can be personally fulfilling. Having served as the Convenor of the SLBC in Telangana, I can attest to the deep satisfaction derived from the tangible impact created through LBS fora.

Over the years, the roles and responsibilities of the LDMs have evolved. But the underpinnings of these myriad objectives remain the same. Today I would like to highlight certain expectations that we have from the functioning of the LDMs. For easy recallability, I have attempted to give a different spin to the acronym – LDM – and identified three attributes viz., (L)iaison, (D)esigning and Development, and (M)onitoring and Motivating. I will now elaborate upon these.”

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