india s post green revolution agricultural performance what is driving growth following a period of poor performance in the 1990s india s agricultural growth rate has reaccelerated in the 2000s some believe the reacceleration has been a product of intensified investment which in turn has spurred yield growth others suggest it is because india s newly wealthy citizens have demanded greater product diversification to examine these hypotheses we use growth accounting techniques in conjunction with more complete agricultural production data than in past studies to construct state regional and national output input and total factor productivity quantity indexes which can be decomposed into their underlying sources sectoral performance evaluation suggests that since 1980 output growth has diffused away from the northern grain belt and toward high value agriculture in traditionally less productive regions productivity growth rather than resource use has accounted for these geographical and intensity shifts the growth burst has not as the literature has primarily argued been uniquely explainable by yield growth or product diversification but by a variety of factors including area expansion for example the contributions of irrigation technologies permitting double cropping have until now been largely ignored

the assessment money and banking theory and evidence this issue of the oxford review is concerned with money and banking the articles in the issue provide a comprehensive overview of recent developments in the literature they systematically evaluate both the theoretical and empirical literature on banks the monetary transmission mechanism the operation of financial systems and bank regulation both in a domestic and an international context does money matter has been a favourite question posed by academic economists for several decades while the question has not changed the answer has during the 1950s and 60s the conventional view was that it does matter during the 1970s and 80s the influence of monetary policy on real as opposed to inflationary developments came to be increasingly questioned the consensus in the 1990s has swung back a few decades to the view that money does matter a new twist to the story which did not feature prominently in the 1950s and 60s debate is that banks as well as money matter of course there were several authors such as gurley and shaw 1960 who pointed to the importance of banks in the monetary transmission mechanism however it is really only in the last decade that economic theorists have turned their attention to the rationale for and the special role of banks the irony of this is that the theoretical justification for banks is appearing just at the moment when many commentators point to the demise of banks in the face of such close substitutes as corporate bond markets money market funds and contingent securities

seasonal poverty in madagascar magnitude and solutions abstract seasonal reductions in food consumption pull about one million malagasy below the poverty line during the lean season there they join the nine million more who remain chronically undernourished throughout the year because the seasonality of food shortages coincides with the increased prevalence of diarrhea and other diseases during the rainy season the resulting lean season exacts a heavy toll in the form of increased rates of malnutrition and child mortality combining the results of recent field studies with a seasonal multi market model this paper measures the probable impacts of three common interventions aimed at combatting seasonal food insecurity we find the most promising interventions to be those that increase agricultural productivity of the secondary food crops such as cassava other roots and tubers and maize

new issues in corporate finance flow of funds data are used to compare methods of finance in 5 countries over the period 1970 to 1985 many of the problems associated with previous studies are avoided by estimating net instead of gross financing proportions the degree of consolidation of accounts reciprocal arrangements between borrowers and lenders and compensating deposit requirements on borrowers no longer distort financing patterns corrections for inflation are provided by employing flow rather than stock figures and using own aggregation procedures to derive stock measures significant variations in financing emerge these are not readily explained by traditional descriptions of corporate finance in particular taxation as an alternative the paper suggests that relationships between borrowers and lenders establish forms of commitment that are conducive to the provision of long term finance the separation between investment and finance which has been the starting point of corporate finance theory is untenable in a multiperiod context in which terms of finance define future allocation of control

rising inequality as a cause of the present crisis the article argues that the economic imbalances that caused the present crisis should be thought of as the outcome of the interaction of the effects of financial deregulation with the macroeconomic effects of rising inequality in this sense rising inequality should be regarded as a root cause of the present crisis i identify four channels by which it has contributed to the crisis first rising inequality creates a downwards pressure on aggregate demand since poorer income groups have high marginal propensities to consume second international financial deregulation has allowed countries to run larger current account deficits and for longer time periods thus in reaction to potentially stagnant demand two growth models have emerged a debt led model and an export led model third in the debt led growth models higher inequality has led to higher household debt as working class families have tried to keep up with social consumption norms despite stagnating or falling real wages fourth rising inequality has increased the propensity to speculate as richer households tend to hold riskier financial assets than other groups the rise of hedge funds and of subprime derivatives in particular has been linked to rise of the super rich

united states export subsidies in wheat strategic trade policy or expensive beggar thy neighbor tactic this paper examines the domestic and international impacts of the u s export enhancement program eep for wheat eep uses targeted in kind subsidies to expand u s exports and was designed specifically to compete with subsidized exports from the european community ec we argue eep cannot be welfare improving for the u s even considering strategic trade theory we then model eep as an in kind constrained targeted export subsidy and determine its price quantity and budgetary effects empirical results show that no exporting country gains from eep and that the intended loser the ec is only slightly harmed we find the export subsidies generate only a small increase in u s wheat exports eep is an expensive program based on our estimates for 1988 government cost of additional wheat exports under eep reached 469 per metric ton

the evolution of institutions in india and its relationship with economic growth this paper examines the evolution in a few public institutions over time in india it presents three types of evidence on institutional outcomes such as losses in power generation backlogs in disposal of court cases on perceptions based measures of governance some going back to the 1960s and finally on customs administration and whether it has been more effective at detecting evasion over time all the evidence suggests that institutional quality has not improved over time it then addresses the two way relationship between growth and institutions in terms of two apparent paradoxes the first is why growth has turned around so dramatically in india despite the relatively limited nature of reforms especially compared with other countries the second paradox is why despite nearly 30 years of rapid growth institutions have not improved the paper offers some explanations that might help explain these paradoxes

agricultural export subsidies as a tool of trade strategy before and after the federal agricultural improvement and reform act of 1996 if the main justification for agricultural export subsidies is that they reduce government costs of deficiency payments then the 1996 farm legislation would make u s export subsidies largely unnecessary an additional argument advanced in favor of export subsidies is that their aggressive use by one country will cause competing countries to reduce or discontinue their own subsidies this argument is explored by means of a nash equilibrium in which countries choose both a base subsidy level and a response to competitors and by a consistent conjectures equilibrium little support is found for the argument during the period of the mid 1980s to the mid 1990s export subsidies became an increasingly important part of u s farm policy in fact expenditures on the export enhancement program eep exceeded 1 billion in fy 1993 the enduring popularity of export subsidies has been a source of puzzlement to economists see r paarlberg for example economists argue that governments could provide more assistance to farmers at the same cost to consumers if the money spent on export subsidies were spent instead on direct subsidies to farmers anania bohman and carter present a strong argument along these lines several papers have found circumstances under which export subsidies might be justified abbott paarlberg and sharples show that export subsidies can improve welfare in the exporting country if they are implemented in a discriminatory way reducing prices in countries with relatively elastic demands abbott and kallio show how export subsidies may complement other policies intended to support producers when the exporting country has market power in the world market another possible explanation for the popularity of export subsidies is advanced by alston carter and smith 1993 1995 they show that export subsidies may be justified because they reduce the budgetary costs of the price support program there is an additional argument which is frequently heard in debates about agricultural export subsidies but which has not been fully analyzed by economists supporters of the eep program argue that to discontinue its use would be tantamount to unilateral disarmament in the war for international market share in agricultural trade in other words export subsidies are a useful tool of

the impact of food stamps on food expenditures rejection of the traditional model for food stamp recipients whose normal food purchases exceed their coupon allotment the traditional economic model predicts that the impact of food stamps on food spending will be the same as for an equal cash transfer the tobit analysis in this study indicates that for these recipients food stamps have a substantially greater impact on at home food expenditures than an equal amount of cash income these results reject the traditional model several possible explanations of this behavior are discussed

does trade liberalization promote regional disparities evidence from a multiregional cge model of india summary over last few decades there has been a growing interest among researchers in understanding the link between trade liberalization and regional disparities within the context of an individual country in this study we develop the first ever single country multiregional computable general equilibrium cge model for the indian economy to investigate this linkage overall our results suggest that in the short run trade liberalization has a beneficial impact on the rich and fast growing middle income states and a marginal or negative impact on the poor states

farm productivity and rural poverty in india armed with new data we return to an old question from the pages of this journal to what extent do india s rural poor share in agricultural growth combining data from 24 household sample surveys spanning 35 years with other sources we estimate a model of the joint determination of consumption poverty measures agricultural wages and food prices we find that higher farm productivity brought both absolute and relative gains to poor rural households a large share of the gains was via wages and prices though these effects took time the benefits to the poor were not confined to those near the poverty line

the role of intangible assets in explaining the investment profit puzzle starting around the early 2000s and especially after the 2008 crisis the rate of capital accumulation for us nonfinancial corporations has slowed down despite relatively high profitability indicating a weakening of the link between profitability and investment while the literature mostly focuses on financialisation and globalisation as the reasons behind this slowdown i suggest adding another layer to these explanations and argue that in conjunction with financialisation and globalisation we need to pay attention to the increased use of intangible assets by nonfinancial corporations in the last two decades intangibles such as brand names trademarks patents and copyrights play a role in the widening of the profit investment gap as the use of these assets enables firms to increase market power and profitability without necessarily generating a corresponding increase in fixed capital investment after discussing the ways nonfinancial corporations use intangible assets i look at large corporations in the usa and find the following i the ratio of intangible assets to the capital stock increased in general this increase is highest for firms in high technology healthcare nondurables and telecommunications ii industries with higher intangible asset ratios have lower investment to profit ratios iii industries with higher intangible asset ratios have higher markups and profitability iv the composition of the nonfinancial corporate sector has changed and the weight of high technology and healthcare firms has increased but this increase did not correspond to an equal increase in their investment share the decline in the investment share of durables nondurables and machinery is matched by an increase in the investment share of location specific industries with low intangible asset use most notably firms in energy extraction in general these firms have steadier markups and higher investment to profit ratios v yet intangible intensive industries profitability has increased faster than their share of investment or total assets all in all these findings are in line with the suggestion that the increased use of intangible assets enables firms to have high profitability without a corresponding increase in investment

who gets the goods a general equilibrium perspective on food aid in mozambique abstract we employ a computable general equilibrium approach to examine the effects of alternative food aid distribution schemes for drought response food aid to mozambique alternative schemes have very distinct impacts on household welfare and prices compared with monetization of food aid by government direct distribution to households by population shares strongly benefits rural households even assuming that government cannot target food aid strictly at drought stricken rural people our results indicate that when improving household welfare is the primary goal of the food aid direct distribution of food aid to households is preferred

the transformation of the indian agricultural input industry has it increased agricultural r d indian agricultural input industries have gone through a major transformation in the last 40 years state owned firms grew during the green revolution and then stagnated or declined indian corporations that were protected from foreign competition are now exporters of agricultural tractors and pesticides foreign multinational corporations are rapidly increasing their role in the seed pesticide and tractor industries entry by large indian firms and multinationals has increased competition in the input industries private agribusiness r d in india grew from 23 million in 1985 to 250 million in 2009 in 2005 us dollars this is the same time period as a transformation in the agricultural input industry rapid growth in demand for agricultural inputs breakthroughs in information technology and biotechnology and changes in intellectual property rights an econometric model was used to test whether the transformation of agricultural input industry was a major factor in the growth of r d expenditure or not this article analyzes a unique firm level sales and r d data set from the seed pesticide tractor and fertilizer industries in 2000 2009 the estimated model indicates that agribusiness firms r d expenditures from 2000 to 2009 were positively related to variables associated with industry transformation such as firm size ownership by multinationals and declining industry concentration the model also indicates that strengthening patent policy as well as growth in the size of research intensive industries like the seed industry contributed to the growth of agribusiness r d in india

demand systems estimation with microdata a censored regression approach demand systems estimation increasingly makes use of household level microdata mainly to measure the effects of demographic variables data based on these household expenditure surveys present a major estimation problem for any given household many of the goods have zero consumption implying a censored dependent variable techniques which do not take this censored dependent variable into account will yield biased results we utilize a censored regression approach that is computationally simple consistent and asymptotically efficient the results are then presented and compared with those obtained using an uncensored technique

how responsive is business capital formation to its user cost an exploration with micro data abstract the response of business capital formation to its user cost is critical to evaluating tax reform deficit reduction and monetary policy evidence for a substantial user cost elasticity however is sparse most evidence has been based on aggregate data although several recent studies with firm level data report substantial effects with a particularly rich micro dataset containing over 26 000 observations this paper explores what can be learned about the user cost elasticity while the results depend to some extent on the specification and econometric technique various diagnostics lead us to prefer a precisely estimated but small elasticity of approximately 0 25 this paper is dedicated to the memory of robert eisner who labored early and ably on uncovering the determinants of investment spending and highlighting the importance of the question found in the title of this paper

financial globalisation and crisis institutional transformation and equity this paper comprises the long introduction to the symposium of five papers on financial globalisation published in the cambridge journal of economics volume 34 no 2 the paper discusses the impact of financial globalisation in a variety of spheres and shows how the five papers link together to provide a coherent view of the current economic and financial crisis in this paper we also examine the globalisation of finance more broadly both in historical terms as well as in relation to the current widespread failure in the financial markets we take up the policy question of how the interests of the poor in particular and developing countries in general could be safeguarded from the vagaries of financial globalisation questioning how much choice communities and countries have and what can the international community do to extend these choices

the impact of agricultural subsidies on global welfare increasing global nature of the world economy have sparked much debate as to whether globalization is a vehicle for growth and development or a bane to society the debate is not simply one between the informed and the uneducated some of the most respected economists in the world disagree as to the impacts of globalization stiglitz 2002 refers to the devastating effect that globalization can have on developing countries on the other hand bhagwati 2004 holds that globalization can be beneficial for both developed and developing countries he postulates that for this to occur there must be a set of new policies and institutions that will help developing countries handle increased volatilities result

the enigma of india india s high growth over the last fifteen years has inspired several recent books and papers to examine the growth s source and sustainability the two volume study by arvind virmani being a case in point this paper evaluates these recent works it is argued that the cause of the take off does not fit into any easy ideological category as suggested by virmani the current high growth has been achieved in several steps with distinct factors of propulsion behind each step there is reason to expect the growth to be sustainable although destabilizing political tensions will arise from the increasing inequality the paper also evaluates how india s growth relates to the global economy

the monetization of project and emergency food aid project level efficiency first abstract the level of food aid monetization has increased sharply particularly in africa and especially to cover the transport and non food costs of food aid projects monetization to raise cash is not wrong in principle and increases the efficiency of cash starved projects however the focus on generating counterpart funds has obscured a more important debate about whether and when food is more appropriate than cash at the project level there can be no general predisposition to use either food or cash but guidelines must be applied in each case

towards de financialisation the role of the state understanding the nature of state financialisation is crucial to ensure de financialisation efforts are successful therefore this article provides a structured overview of the emerging literature on financialisation and the state we define financialisation of the state broadly as the changed relationship between the state understood as sovereign with duties and accountable towards its citizens and financial markets and practices in ways that can diminish those duties and reduce accountability we then argue that there are four ways in which financialisation works in and through public institutions and policies adoption of financial logics advancing financial innovation embracing financial accumulation strategies and directly financialising the lives of their citizens organising our review around the two main policy fields of fiscal and monetary policy four definitions of financialisation in the context of public policy and institutions emerge when dealing with public expenditure on social provisions financialisation most often refers to the transformation of public services into the basis for actively traded financial assets in the context of public revenue financialisation describes the process of creating and deepening secondary markets for public debt with the state turning into a financial market player finally in the realm of monetary policy financial deregulation is perceived to have paved the way for financialisation while inflation targeting and the encouragement or outright pursuit of market based short term liquidity management among financial institutions constitute financialised policies

profitability in india s organized manufacturing sector the role of technology distribution and demand using aggregate data from the annual survey of industries we analyze profitability in india s organized manufacturing sector from 1982 83 to 2012 13 over the whole period of analysis the rate of profit grew at about 1 per annum primarily driven by a rising share of profits we use visual inspection to identify five shorter run profitability regimes 1982 91 1991 96 1996 2001 2001 07 and 2007 12 profit rate decomposition analysis shows that both technological factors and aggregate demand have been important determinants of changes in profitability in these shorter periods

formal and informal interests of donors to allocate aid spending patterns of usaid giz and eu forest development policy in bangladesh summary whether aid serves the development needs of a recipient country rather than the interests of donors has been a topic of much debate and research in the field of development studies donor agencies have interests as does any political actor and bureaucratic politics theory states that any bureaucracy has a dual interest consisting of delivering on its formal mandate as well as informally increasing its power by maximizing budgets staff and fields for political responsibility this study aims to conceptualize the formal and informal interests of bilateral foreign donor bureaucracies in allocating aid using bangladesh forest development aid by usaid giz and the eu as a case study quantitative analysis of documents on actual spending in the context of forest development projects and qualitative analysis from detailed interviews with development aid experts are employed important informal interests of donor agencies were observed as follows 1 drawing on consultants as well as products and services from the donor s country 2 expanding favorable markets for the donor s economy 3 increasing the donor s geopolitical as well as policy influence in recipient countries 4 obtaining information that is independent from the recipient government and 5 shaping good governance as a prerequisite for investment from donor countries of the three donor organizations usaid was found to have allocated extensive aid to two activities consultancy and collaboration and networking that advance usaid s informal economic and political interests giz allocated major aid to recipient developmental interventions it also advanced its informal economic and political interests albeit to a smaller extent the eu allocated the largest amount of aid to developmental interventions though its informal economic and political interests were also served even if only to a limited extent this study concludes with key points regarding informal interests of donor bureaucracies as well as on future research fields

the digital provide information technology market performance and welfare in the south indian fisheries sector when information is limited or costly agents are unable to engage in optimal arbitrage excess price dispersion across markets can arise and goods may not be allocated efficiently in this setting information technologies may improve market performance and increase welfare between 1997 and 2001 mobile phone service was introduced throughout kerala a state in india with a large fishing industry using microlevel survey data we show that the adoption of mobile phones by fishermen and wholesalers was associated with a dramatic reduction in price dispersion the complete elimination of waste and near perfect adherence to the law of one price both consumer and producer welfare increased

targeted agricultural export subsidies and social welfare global export subsidies are known to be welfare reducing this paper demonstrates that a small targeted subsidy can increase the welfare of the subsidizing country by exploiting differences in excess demand elasticities targeted export subsidies can also increase the subsidizing country s welfare by exploiting transportation cost differences excess supply elasticities of competitors or excess demand elasticities of markets supplied by competitors when markets are shared an empirical model of the world wheat market illustrates the theoretical conclusions an optimal targeted subsidy scheme causes a small increase in u s welfare but with major disruptions in world trade flows

technology distribution and the rate of profit in the us economy understanding the current crisis this paper offers a synoptic account of the state of the debate among marxist scholars regarding the current structural crisis of capitalism identifies two broad streams within the literature dealing in turn with aggregate demand and profitability problems and proceeds to concentrate on an analysis of issues surrounding the profitability problem in two steps first evidence on profitability trends for the non farm non financial corporate business the non financial corporate business and the corporate business sectors in post war usa are summarised a broad range of profit rate measures are covered and data from both the us bureau of economic analysis nipa and fixed assets tables and the federal reserve flow of funds account are used second the underlying drivers of profitability in terms of technology and distribution are investigated the profitability analysis is used to offer some hypotheses about the current structural crisis copyright oxford university press

the economic lives of the poor in what turned out to be a rhetorical master move the 1990 world development report from the world bank defined the extremely poor people of the world as those who are currently living on no more than 1 per day per person measured at the 1985 purchasing power parity ppp exchange rate in 1993 the poverty line was updated to 1 08 per person per day at the 1993 ppp exchange rate which is the line we use in this paper poverty lines have always existed indeed 1 per day was chosen in part because of its proximity to the poverty lines used by many poor countries 1 however the 1 a day poverty line has come to dominate the conversations about poverty to a remarkable extent

financialisation and capital accumulation in the non financial corporate sector a theoretical and empirical investigation on the us economy 1973 2003 recent research has explored the growing financialization process in the u s and other advanced economies the term is a catch all phrase used to denote important changes in the structure of non financial corporations balance sheets including the growth of income from financial subsidiaries and investment as well as growth in the transfer of earnings to financial markets in the forms of interest payments dividend payments and stock buybacks this paper seeks to empirically explore the relationship between financialization in the u s economy and real investment at the firm level using data from a sample of non financial corporations from 1973 to 2003 i find a negative relationship between real investment and financialization first increased financial investment and increased financial profit opportunities may have crowded out real investment by changing the incentives of firm managers and directing funds away from real investment second increased payments to the financial markets may have impeded real investment by decreasing available internal funds shortening the planning horizons of the firm management and increasing uncertainty these two channels can help explain the negative relationship i find between investment and financialization

rates of return on capital across the world are they converging this article estimates levels and identifies trends in the profitability of capital in a broad sample of developed developing and post communist transition economies making up over 80 of global output the underlying distributional and efficiency determinants of profitability are considered in the marxian analytical framework for the period of 1995 2007 leading to the great recession our estimates indicate a trend towards convergence of national profit rates largely driven by the convergence of profitability in developing and transition economies during this period the level of profit rates in all groups of countries experienced growth with the global capital weighted rate of profit increasing by approximately 50 the main contributor to this growth in all groups of countries was the increase in average productivity of capital measured by output capital ratio in developed and transition economies the increase in profit shares of national income and the decline in the relative price of capital goods also contributed to profitability growth in the same period for developing countries profit shares and relative prices were relatively stable

economic reforms in india since 1991 has gradualism worked opinions on the causes of india s growth deceleration vary world economic growth was slower in the second half of the 1990s and that would have had some dampening effect but india s dependence on the world economy is not large enough for this to account for the slowdown critics of liberalization have blamed the slowdown on the effect of trade policy reforms on domestic industry however the opposite view is that the slowdown is due not to the effects of reforms but rather to the failure to implement the reforms effectively this in turn is often attributed to india s gradualist approach to reform which has meant a frustratingly slow pace of implementation however even a gradualist pace should be able to achieve significant policy changes over ten years this paper examines india s experience with gradualist reforms from this perspective

the economics of the profit rate competition crises and historical tendencies in capitalism part 1 the profit rate the economics of the profit rate a summary definitions and measures of the profit rate part 2 competition and prices of production prices of production long term equilibrium in classical and walrasian models the classical analysis of competition convergence part 3 general disequilibrium a general disequilibrium model development of the basic model proportions and dimension in the short and long terms out of the mainstream part 4 stability and business fluctuations the real and monetary determinants of macro in stability the impact of the profit rate on the macroeconomy business fluctuations in other paradigms part 5 technology and distribution a historical perspective the historical profile of the profit rate historical tendencies accumulation and growth profitability trends part 6 history profitability and management a chronological overview the historical dynamics of capitalism

technology and distribution historical trajectories a la marx abstract in capital marx introduces a system of historical tendencies accounting for the trends of the major technological and distributional variables notably the profit rate quite distinct from the usual steady states marx s main insight is that of a difficulty to innovate it is difficult to find new processes allowing for the growth of labor productivity while not considerably reducing the productivity of capital the growth of the wage rate is stimulated by the rise of employment but the stabilization of the share of wages forbids a direct imputation of the decline of the profit rate to the excessive growth of the wage rate

output and labor productivity in organized manufacturing a panel cointegration analysis for india abstract one of the policy puzzles faced in india during the last two and half decades has been the weak association between output and labor markets particularly in the manufacturing sector in this research we investigate the long run relationship between output labor productivity and real wages in the case of organized manufacturing we adjust the measure of labor productivity incorporating bottlenecks such as lack of infrastructure access to external finance and labor regulations which all may influence labor market outcomes using panel data from seventeen manufacturing industries we establish long run dynamics for the output labor productivity real wages series over a period of nearly three decades we employ recently developed panel unit root and cointegration tests for cross sectional dependence to incorporate heterogeneity across industries long run elasticities are generally found to be low for labor productivity compared to real wages due to the changes in manufacturing output there are variations across industries within the manufacturing sector for the effects of the labor market on manufacturing output in some industries lower wages are associated with higher output and the reason for the positive relationship in other industries could be due to workers bargaining power

measuring segregation of the poor evidence from india summary compared to the extensive literature on measurement of poverty the question of how the poor are distributed regionally has received less attention this paper fills the gap in the literature by providing a conceptual framework to measure inequality in the distribution of the poor a poverty segregation curve is used to compare a region s share of the poor population with its share in the overall population a unique contribution of the paper is formulating a generalized version of the poverty segregation curve unlike the segregation curve the generalized segregation curve also takes average poverty rates into account while ranking distributions thus the generalized segregation curve may rank a distribution with substantially lower poverty rates above a distribution with higher poverty rates when differences between their segregation curves are relatively small the segregation curves are used to analyze changes in the distribution of the poor in india since the economic reforms in the early 1990s poverty rates and shares among all states territories and districts in india are estimated using data from the national sample survey organization in 1994 2004 and 2010 in the decades following the reforms india witnessed high growth rates and declining poverty rates despite the reduction in poverty our analysis is the first to reveal that there was a significant rise in segregation of the poor over time some states had disproportionately high share of the poor compared to their share in the total population within states the extent of segregation was lower among some of the poorest states and higher in less poor states the generalized segregation curves show that the substantial decline in poverty rates since the reforms was not adequate to compensate the rise in segregation of the poor increase in segregation was also evident when the poor are identified as those who lacked education health and access to basic services reducing the segregation of the poor is important if india is to attain regionally balanced economic growth

rationalizing agricultural export subsidies comment alston carter and smith acs claim an export subsidy can be an efficient mechanism for redistributing income to producers and is always so in a small country unable to influence the world price when raising government revenue causes deadweight losses this claim is surprising in view of the general result in trade theory that domestic distortions are more efficient transfer mechanisms than border distor

is india s economic growth leaving the poor behind there has been much debate about how much india s poor have shared in the economic growth unleashed by economic reforms in the 1990s the authors argue that india has probably maintained its 1980s rate of poverty reduction in the 1990s however there is considerable diversity in performance across states this holds some important clues for understanding why economic growth has not done more for india s poor india s economic growth in the 1990s has not been occurring in the states where it would have the most impact on poverty nationally if not for the sectoral and geographic imbalance of growth the national rate of growth would have generated a rate of poverty reduction that was double india s historical trend rate states with relatively low levels of initial rural development and human capital development were not well suited to reduce poverty in response to economic growth the study s results are consistent with the view that achieving higher aggregate economic growth is only one element of an effective strategy for poverty reduction in india the sectoral and geographic composition of growth is also important as is the need to redress existing inequalities in human resource development and between rural and urban areas

econometric modelling in the presence of evolutionary change a methodology is offered which can be used to construct an econometric model in the presence of structural change of an evolutionary type the theoretical basis for such modelling is drawn from the self organisation approach and operationalised in the context of the logistic diffusion growth model the latter is augmented to allow for the impact of exogenous effects upon both the diffusion rate and boundary limit we show how the hypothesis of augmented logistic diffusion can be falsified using econometric methods an illustrative case study is used namely the growth and decline of australian building society deposits with the aid of this example it is shown how the approach could be of use to both economic forecasters and regulators in conditions of structural change where conventional econometric methods are often inappropriate jel classification c51 c53 e42 e47 g18 o31

turnover time and the organic composition of capital this article argues that marx s key concepts of the organic and value compositions of capital depend on his concept of the turnover time of variable capital methods are given for measuring these three indicators which are applied to the us national accounts from 1947 onwards the results show unambiguous tendencies for the organic and value compositions of capital to rise and for the turnover time of variable capital to fall this is consistent with marx s predictions in capital and his explanation for the tendency of the rate of profit to fall

union bargaining power subcontracting and innovation we show that if a firm can subcontract production to an informal sector an increase in union power may either increase or decrease innovation an increase in union power makes the firm worse off irrespective of its effect on innovation however in contrast to the usual belief an increase in union power may increase consumer surplus and decrease union utility by affecting innovation thus suggesting that a union may not want to be too powerful an increase in union power may create an ambiguous effect on social welfare our analysis provides new insights to the relation between union power and innovation

profit growth in boom and bust the great recession and the great depression in comparative perspective the great recession of 2007 2009 and the great depression of the 1930s were triggered by the collapse of asset price bubbles however preexisting structural imbalances in the us economy were the reason why the burst of speculative bubbles induced a general economic collapse this article argues that the imbalance created by the combination of stagnant labor earnings and surging corporate profits not only played a leading role in the run up to the downturns but also was chiefly responsible for the slow recoveries on the one hand the relative stagnation of labor income represented a key factor behind rising income inequality and a potential drag on consumption which was temporarily alleviated by credit expansion hence the rising household debt levels eventually became unsustainable on the other hand rising corporate profits created an overhang of idle money eager to lend itself to speculative ventures which played a key role in fueling the stock market bubble of the 1920s and the housing bubble of the 2000s the article further argues that despite various superficial and deeper similarities between the circumstances surrounding the great recession and the great depression some fundamental differences in the structure of the us economy then and now suggest vastly different future prospects for american capitalism

the effects of farm subsidies on farm exports in the united states we estimate the elasticity of u s farm exports to u s farm subsidies using a gravity model of state level farm exports to 100 major trading destinations for the period 1999 to 2011 our identification strategy exploits the within state variation that is free of endogeneity bias in the levels and trends of farm subsidies and farm exports we find that a 1 decrease in farm subsidies would reduce u s farm exports by 0 40 per annum this equivalently means that the complete abolishment of the farm subsidy program would reduce u s farm exports by approximately 15 3 billion per year importantly we document robust evidence that amber box subsidy programs such as counter cyclical payments and marketing loan gains have the strongest effect on farm exports while green box subsidy payments such as direct payments have negligible effects finally subsidy payments affect exports only in agricultural commodities not in livestock our subsidy elasticity estimates are statistically significant stable and economically meaningful and are vitally needed by u s and global policymakers in the face of critical domestic and international developments

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

the welfare effects of targeted export subsidies a general equilibrium approach a three country model of export subsidies is developed with an exporter an importer and a neutral country which can act on either side of the market when the neutral country is an exporter the country offering a targeted export subsidy always suffers a welfare loss however when the neutral country is an importer the possibility of a paradoxical result that the subsidizing country can gain and the subsidized country can lose is shown to exist and the conditions under which this result occurs are derived the model fails to provide justification on national welfare grounds for widespread use of targeted export subsidies such as the export enhancement program

cash versus direct food relief abstract the usual method of providing relief to a famine region is to import food and distribute it to the needy direct food relief if there are markets for food in the region however a relief agency could just as easily distribute money to the needy and let them purchase food in the market cash relief this alternative has been much discussed in the famine literature recently the purpose of this paper is to clarify the conditions under which cash relief will be more or less effective than direct food relief by analyzing the relative effectiveness of the two policies in a formal model

capital market imperfections and financialization of real sectors in emerging markets private investment and cash flow relationship revisited summary the paper analyzes the impacts of cash flow from multiple investments in real and financial sectors on the new fixed investment spending of real sector firms the empirical results based on the euler equation approach and semi annual firm level data from two major emerging markets mexico and turkey suggest that profits and rates of returns from fixed and financial assets have differential effects on fixed investment spending of real sector firms accordingly increasing availability and accessibility of alternative investment opportunities in financial markets can become instrumental in channeling real sector savings to short term financial investments instead of long term fixed capital formation and thus lead to deindustrialization

the effects of financialization on investment evidence from firm level data for the uk this paper estimates the effects of financialization on physical investment in the uk using panel data based on balance sheets of publicly listed non financial companies supplied by worldscope for the period 1985 2013 we find robust evidence of an adverse effect of not only financial payments interests and dividends but also financial incomes on the rate of accumulation the negative impacts of financial incomes from interests and dividends are particularly strong for the pre crisis period our findings support the financialization thesis that the increasing orientation of the non financial sector towards financial activities is ultimately leading to lower physical investment hence to stagnant or fragile growth as well as long term concerns for productivity

how can we explain the persistence of the great recession a balanced stability approach the great recession gr brings about a stalemate in macroeconomics on the one hand while describing the immediate effects of the gr standard models fail to account for its persistence on the other heterodox approaches do not regain consensus as they fail to devise an alternative method for capturing the deep causes of the gr that account for its persistence in a systematic way this paper fills this gap by proposing a new framework called balanced stability approach unlike standard macro which takes stability for granted it provides a balanced assessment of stability considering both threats and opportunities for phenomena such as the so called new economy ne on a par on these grounds the paper draws the conclusion that the persistence of the gr is due to a low level of aggregate demand rooted in the structural changes generated by the ne

aspects of moral change in india 1990 2006 evidence from public attitudes toward tax evasion and bribery summary observers have asserted that india s economic rise coincides with moral change this study assesses some notable aspects of this claim by using public attitudes toward tax evasion and bribery as indicators of moral values using repeated cross sectional data from the world values surveys i find that tolerance for tax evasion and bribery grew relatively slightly from 1991 to 1996 and then increased rapidly from 2001 to 2006 double interaction regression models show tolerance converging by gender and religion and tolerance diverging between the poor and non poor however the regional patterns are complex finally university educational attainment is associated with decreasing tolerance

economic liberalization and indian economic growth what s the evidence india s growth and poverty performance over the last three decades has been a subject of great curiosity unlike the east asian countries india s growth spurt is not associated with exceptionally high domestic savings or foreign capital inflows or manufacturing exports so what triggered the change in the growth trajectory did the market liberalization policies of the 1990s help how have the initial conditions shaped the process and how has the indian model impinged on india s central problem of mass poverty this paper surveys the literature and offers its own assessment of the drivers of change jel i32 o13 o14 o15 o21 o47

the impact of corruption on consumer markets evidence from the allocation of second generation wireless spectrum in india abstracttheoretical predictions of the impact of corruption on economic efficiency are ambiguous with models allowing for positive negative or neutral effects while much evidence exists on levels of corruption less is available on its impact particularly its impacts on consumer markets this paper investigates empirically the effect of the corrupt sale of spectrum licenses to ineligible firms on the wireless telecommunications market in india i find that the corrupt allocation had at worst no impact on the number of subscribers prices usage revenues competition and measures of quality i argue that the market based transfer of licenses to competent firms other than the original awardees combined with fierce competition in the telecommunications sector may have mitigated potential deleterious impacts of corruption on consumers these results suggest that the original corrupt allocation did not matter which provides support for the coase theorem

the financialisation offshoring nexus and the capital accumulation of us non financial firms the financialisation of the nonfinancial corporation has drawn the attention of many scholars who have identified two channels by which financialisation happens a higher proportion of financial assets compared to nonfinancial ones and a higher amount of resources distributed to financial markets one of the consequences of this is the decrease in investment parallel to financialisation many nonfinancial corporations have also engaged in an internationalization of their productive activities organizing them under global value chains surprisingly the intersections between the literature on financialisation and the literature on global value chain are still underdeveloped although for example offshoring may also explain the decrease in investment of nonfinancial firms this paper fills this gap using panel regressions for u s nonfinancial corporations between 1995 and 2011 we find evidence that both offshoring and financialisation are determinants to the decrease in investment and that financialisation occurs mainly for firms belonging to high offshoring sectors la financiarisation des societes non financieres a attire l attention de nombreux chercheurs qui ont identifie deux canaux par lesquels elle se produit les bilans des societes sont composes d une plus grande proportion d actifs financiers relativement aux actifs non financiers et une plus grande part des ressources est redistribuee vers les marches financiers l une des consequences qui en resulte est la baisse de l investissement parallelement a ce mouvement de financiarisation beaucoup de societes non financieres ont developpe l internationalisation de leur production en l organisant selon des chaines globales de valeur il est surprenant de constater que les liens entre la litterature sur la financiarisation et celle sur les chaines globales de valeur soit peu developpee bien que par exemple le transfert de la production a l etranger puisse aussi expliquer la baisse de l investissement des firmes non financieres cet article vise a combler cette lacune en menant des regressions sur un panel de firmes americaines entre 1995 et 2011 nous montrons que tant le transfert de production a l etranger que la financiarisation sont des determinants de la baisse de l investissement nous montrons egalement que la financiarisation touche surtout les firmes appartenant a des secteurs fortement inserees dans les chaines globales de valeur

regional trade government policy and food security recent evidence from zambia given heavy dependence on rainfed maize production countries in east and southern africa must routinely cope with pronounced production and consumption volatility in their primary food staple typical policy responses include increased food aid flows government commercial imports and stock releases and tight controls on private sector trade this paper examines recent evidence from zambia using a simple economic model to assess the likely impact of maize production shocks on the domestic maize price and on staple food consumption under alternative policy regimes in addition to an array of public policy instruments the analysis evaluates the impact of two key private sector responses in moderating food consumption volatility private cross border maize trade and consumer substitution of an alternate food staple cassava for maize the analysis suggests that given a favorable policy environment private imports and increased cassava consumption together could fill roughly two thirds of the maize consumption shortfall facing vulnerable households during drought years

financialisation and tendencies towards stagnation the role of macroeconomic regime changes in the course of and after the financial and economic crisis 2007 09

what has luck got to do with it a regional analysis of poverty and agricultural growth in rural india this article explores the role of agro ecological factors associated with agricultural growth and poverty outcomes in india using a new operationalisation of agro ecological factors and incorporating within state variations in poverty and other variables we show that agricultural growth and poverty reduction appear to depend on underlying agro ecological conditions which are favourable to the spread of irrigation and hence agricultural development which in turn in associated with poverty reduction promotion of agriculture in less favoured areas in unlikely to have similar effects on agriculture in less favoured areas is unlikely to have similar effects on agricultural growth even if the effects of agricultural growth on poverty remain similar unless conditions for irrigation are favourable or rainfall is sufficiently abundant and reliable this suggests that considerable caution may be needed in drawing policy conclusions from empirical analysis by state alone and without regard to their underlying f

shifting sands the changing case for monetizing project food aid in bangladesh abstract monetization involves local sale of food aid commodities and using the cash to finance other programs to explore the likely consequences of monetization this paper combines a stockpile of recent microeconomic evidence from food and cash for work projects in bangladesh together with a multimarket simulation model results suggest that a switch from food for work s ffw in kind deliveries of wheat to an identical wheat financed cash for work cfw program would unambiguously improve welfare of the poor

rationalizing agricultural export subsidies export subsidies are an important form of agricultural policy especially for large traders such as the united states and the european community a number of small countries also use export subsidies in effect e g saudi arabian wheat or canadian dairy products in that the domestic price is set well above world levels and surplus production is dumped onto the world market a number of recent contributions to trade theory have argued that export subsidies can be welfare enhancing for the subsidizing country and by implication that the policy choice is consistent with the hypothesis that a benevolent government is pursuing pareto efficiency in the present paper we examine these arguments and present an alternative explanation of export subsidies utilizing the concept of efficient redistribution becker gardner 1983 in standard trade models arguments in favor of global export subsidies arise from failure to exploit market power in another good itoh and kiyono feenstra itoh and kiyono use a threegood model to show that subsidies on marginal goods defined as goods not exported at all or exported in small quantities can increase welfare in the subsidizing country a subsidy on marginal goods causes their production to increase and the supply of nonmarginal goods to decrease thereby raising the price of the nonmarginal goods and increasing the exporter s terms of trade feenstra also employs a threegood model and demonstrates that it is possible for the pattern of substitutability and complementarity across goods to allow subsidies to increase welfare the necessary condition is that the subsidized export be a stronger substitute for another exported good or a stronger complement for an imported good in the subsidizing country than abroad the export subsidy increases welfare by improving the terms of trade in the other imported or exported good the distortion in feenstra s model is the failure to exploit market power in the second or third market as an alternative to global export subsidies abbott paarlberg and sharples aps have examined targeted export subsidies and found that in some circumstances they can be welfare improving dutton later showed the aps result arises because they first constrain the export tax to the rest of the world to be zero so that it becomes theoretically possible for the best export tax to the targeted country to be negative the aps result hinges on differences in import demand elasticities and the exporting country s use of market power in order to price discrim

financial development financial structure and domestic investment international evidence does it matter for domestic investment whether a country s financial system is bank based or stock market based this paper posits that financial intermediation affects domestic investment notably by alleviating financing constraints allowing firms to increase investment in response to increased demand for output the key result is that the structure of the financial system has no independent effect on investment in the sense that it does not enhance the response of investment to changes in output while financial development makes investment more responsive to output growth consequently rather than promoting a particular type of financial structure countries should implement policies that reduce transactions costs in financial intermediation and enforce creditor and investor rights this will facilitate the development of banks and stock markets which will stimulate domestic investment

agricultural productivity growth rural economic diversity and economic reforms india 1970 2000 a salient theme in d gale johnson s work is the importance of agricultural development for general prosperity and for economic diversification e g johnson 2000 johnson has also noted that most of the world s poor are engaged in farming so that a key focus of development policy is to raise the incomes of farmers from a global perspective increasing the productivity of agriculture given the fixity of land is necessary for both poverty reduction and the development of the nonagricultural sector at the level of the world agricultural productivity gains poverty reduction and the growth of the nonfarm sector are complements however the question remains whether these observations imply that every poor country should focus its public resources on agricultural development in order to raise the incomes of people now engaged in farming and whether such a policy is necessary for obtaining economic diversity in this article we use the experience of india over the past 30 years to address the issue of whether agricultural technical change actually leads to economic diversification and income growth within the rural sector in the context of an open economy country in which there are cross area trade and capital flows we focus in particular on the rural sector because this is the sector in which linkages between agricultural and nonagricultural sectors are thought to be the strongest we exploit the fact that india has maintained a policy of openness with respect to agricultural technology over this period permitting and actively supporting agricultural development and has moved to a reformed regime in which goods are traded and capital is more mobile in the 1990s evidence on the relationship between agricultural growth and nonfarm

financialisation and the slowdown of accumulation over the past decades financial investment of non financial businesses has been rising and accumulation of capital goods has been declining the first part of the paper offers a novel theory to explain this phenomenon financialization the shareholder revolution and the development of a market for corporate control have shifted power to shareholders and thus changed management priorities leading to a reduction in the desired growth rate in the second part the link between accumulation and financialization is tested econometrically by means of a time series analysis of aggregate business investment for usa uk france and germany extensive test of robustness are performed for the first three countries evidence that confirms the negative effect of financialization on accumulation is found author s abstract

realization and accumulation in a marxian model of the circuit of capital abstract a mathematical model of marx s circuit of capital is presented whose elements the composition of capital the rate of surplus value the rate of capitalization of surplus value and production sales and financial time lags are measurable from the accounts of capitalist firms the model is solved for exponential paths a solution with a positive rate of accumulation generally exists on paths with positive rates of accumulation and positive time lags in the recommital of realized value to production an expansion of credit is required to permit the sale of commodities a model of demand pull inflation is incorporated in the framework

preferences spatial prices and inequality abstractthis study examines the effect of prices on inequality in rural india during the period of economic reforms and beyond 1999 2000 2009 2010 it proposes a framework for calculating exact price indices based on the exact affine stone index easi demand system and shows its usefulness by calculating spatial prices and regionally varying temporal prices that allow for both differences in preferences between states and over time the study finds that the nature of inflation has been regressive during 1999 2000 2004 2005 and progressive during 2004 2005 2009 2010 and that the effects of temporal price inflation and spatial prices on inequality are qualitatively different

do rural banks matter evidence from the indian social banking experiment lack of access to finance is often cited as a key reason why poor people remain poor this paper uses data on the indian rural branch expansion program to provide empirial evidence on this issue between 1977 and 1990 the indian central bank mandated that a commercial bank can open a branch in a location with one or more bank branches only if it opens four in locations with no bank branches we show that between 1977 and 1990 this rule caused banks to open relatively more rural branches in indian states with lower initial financial development the reverse is true outside this period we exploit this fact to identify the impact of opening a rural bank on poverty and output our estimates suggest that the indian rural branch expansion program significantly lowered rural poverty and increased non agricultural output

quantitative empirical research in marxist political economy a selective review this paper surveys quantitative empirical research in some key areas of marxist political economy following an introductory section on the value controversy the paper surveys quantitative empirical research on the following topics a marxist national accounts b classical marxist theory of relative prices c probabilistic political economy d profitability analysis and e classical marxian theories of growth and technical change i end by highlighting two important puzzles in the extant literature

steady change the 200 largest us manufacturing firms throughout the 20th century this paper discusses the existence of structural change in business activity and technological competence among the 200 largest us manufacturing companies throughout the 20th century the data were taken from chandler scale and scope 1990 and fortune magazine the analysis of corporate evolution in used to assess continuity versus turbulence of business organizations in the context of the neo schumpeterian long wave hypothesis the empirical results show that the giants of the late 20th century are not the same as those at the beginning of that period persistence in the sample is very limited moreover turbulence is not smooth but rather occurs by impulses that affect specific industries and it has increased over time overall the pattern of corporate entry and industry development is very indicative of the new opportunities emerging with information and communication technologies this process of open ended continuous transformation supports the case for putting change at the centre of economic analysis

poverty and growth in india over six decades we study the evolution of consumption poverty measures for post independence india including 20 years since extensive economic reforms began in 1991 progress against poverty was negligible until the mid 1970s after which a downward trend in poverty measures emerged the pace of poverty reduction accelerated in the post reform period despite rising inequality amidst faster growth a key finding is that the relationship to the pattern of growth changed greatly suggesting stronger intersectoral linkages with urban consumption growth benefiting both the rural and urban poor in contrast to the pre reform period growth in primary secondary and tertiary sector outputs yielded similar impacts on poverty

unproductive accumulation in the usa a new analytical framework in this paper i offer an innovative analysis of unproductive accumulation in the united states economy from 1947 to 2011 i develop a new theoretical and empirical framework to analyze the accumulation of capital in its productive and unproductive forms i also develop a methodology to compute marxist categories predicated on the idea that the production of knowledge and information is an unproductive activity that relies on the creation of knowledge rents in particular i provide new empirical estimates to uncover the shifting balance between productive and unproductive forms of accumulation the accumulation pattern observed during the 1947 1979 phase that prioritized productive accumulation gave way after the 1980s to a contrasting pattern prioritizing unproductive accumulation unproductive activity has been growing at a fast pace in terms of incomes fixed assets and employment among all forms of unproductive activity my approach places special attention on how the production of knowledge and information has constituted a rising share of total unproductive income and capital stock additionally productive stagnation and rapid unproductive accumulation have been related to greater exploitation of productive workers and to widening income inequality