ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Sabyasachi KarSubscribe to Sabyasachi Kar

Do Machine Learning Techniques Provide Better Macroeconomic Forecasts?

Machine learning techniques are now very common in many spheres, and there is a growing popularity of these approaches in macroeconomic forecasting as well. Are these techniques really useful in the prediction of macroeconomic outcomes? Are they superior in performance compared to their traditional counterparts? We carry out a meta-analysis of the existing literature in order to answer these questions. Our analysis suggests that the answers to most of these questions are nuanced and conditional on a number of factors identified in the study.

Untangling Policy Mishaps

A number of economic and health policies adopted during the COVID-19 pandemic have been rendered partially or fully ineffective due to offsetting actions from private individuals, resulting in policy mishaps. This article demonstrates that these policy mishaps are the result of not one, but several types of policy conundrums entangled with one another, creating a complex policy challenge. It also provides a sketch of what a comprehensive policy package should look like.


Unmaking ‘Make in India’

India’s business climate has historically been considered poor, resulting in low-rankings in the World Bank’s Doing Business Indicators. The National Democratic Alliance government has attempted to reverse this situation by improving the de jure rules related to the business climate. Whether this approach will improve the ease of doing business in India is analysed by using firm-level data on the number of days it takes to get an operating licence or construction permit. De facto deals between the state and businesses, rather than de jure rules, characterise the state–business relationship in Indian states. States with weaker quality of governance provide higher proportions of good deals in terms of the speed of obtaining licences and permits, and easing the norms of business regulations need not necessarily lead to higher productivity.

B B Bhattacharya (1945–2017)

Barid Baran Bhattacharya, BB to his colleagues and friends, passed away on 14 February 2017. His sad and untimely demise has been painful to those of us who had worked closely with him over the years.

Boom and Bust?

India's post-reform growth experience can be separated into three distinct growth episodes. The first growth episode was from 1993 to 2002 and was characterised by a set of predictable informal relationships ("ordered deals") between political and economic elites, which were relatively open as well. The second episode was from 2002 to 2010, and deals in this period became increasingly closed, leading to negative feedback effects along with structural retrogression of the economy. The third episode, beginning in 2011, was one of an incipient growth deceleration, and was characterised by increasingly disordered deals. This paper argues that this deceleration is the outcome of two separate phenomena: (1) increasing political delegitimation of the growth process that was seen as highly predatory and corruption-intensive; and (2) the pushback from accountability institutions in the post-2010 period. For growth to return, more than economic reforms or infrastructure spending, it is necessary for a realignment of the relationships between political and economic elites and between elites and non-elites such that there is a return to "open ordered deals".

Reforms and Regional Inequality in India

This article analyses the impact of pro-market reforms on regional inequality in India, both at the aggregate and the sectoral level. It draws on the "new economic geography" literature that evaluates the impact of reforms on regional inequality in a country, in terms of the centripetal and centrifugal forces generated in the economy. The results show that regional inequality in India remained largely unchanged during the 1980s but rose dramatically after the adoption of the reforms. This is mainly due to the fact that the per capita output from the industrial and services sectors showed convergence before the reforms and divergence afterwards.

Forecasting State Domestic Product and Inflation

At present, states in India make their own assessment regarding economic growth for their planning and budgeting purposes. These assessments are mostly derived from judgments rather than from serious econometric modelling. The regional econometric model developed in this paper aims to forecast growth rates of the aggregate and sectoral GSDP for the three states. It attempts to capture the medium-run trends and characteristics of the economy of each state, taking into consideration the structural changes in the Indian economy during the period.

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