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Monthly Archives: June 2017



International Labour Organization 2016

The World Employment and Social Outlook – Trends 2016 was prepared jointly by the Job Friendly Macroeconomic Policies Unit (led by Ekkehard Ernst) and the Policy Assessment Unit (led by Steven
Tobin) of the ILO Research Department.

The world economy is estimated to have expanded by 3.1 per cent in 2015, over half a percentage point less than had been projected a year earlier. If current policy responses are maintained, the outlook is for continued economic weakening, posing significant challenges to enterprises and workers. Indeed, over the next two years, the world economy is projected to grow by only around 3 per cent,
significantly less than before the advent of the global crisis.
The continuing slowdown in economic growth is being driven by weakness in emerging and developing countries. China is facing a pronounced slowdown. This, combined with other factors, has contributed to a steep decline in commodity prices, particularly those related to energy. This situation has, in turn, affected large emerging economy commodity exporters, such as Brazil and the Russian Federation, which have entered a period of recession. The benefits accruing to net commodity importers have been insufficient to offset the decline affecting exporters. Another sign of economic weakness is the fact that global trade, which had typically expanded twice as fast as the global economy, is now growing in line with or at a lower rate than global growth.

read more here …
courtesy – ILO


South Asia’s Turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse

Gladys Lopez-Acevedo, Denis Medvedev, and Vincent Palmade
The World Bank, 2017

South Asia is undergoing a rapid economic transformation and has the potential to become the next major middle-income region of the world. More than a million young people are reaching working age every month, and the population of the region’s mega agglomerations and sprawling cities is expanding at roughly the same pace.
By 2030 more than a quarter of the world’s working adults will live in South Asia. But the region has not been particularly successful in integrating within itself and with the global economy.The demographic transition and urbanization on the one hand, and poor competitiveness on the other, are South Asia’s greatest opportunity and greatest challenge.

url – https://openknowledge.worldbank.org/bitstream/handle/10986/25094/9781464809736.pdf
courtesy – The World Bank

International Trade and Productivity Growth: Evidence from the Organised Manufacturing Sector in India

R. Rijesh

ISID Working Paper 198, 2017

The present study is an attempt to examine the impact of international trade on manufacturing productivity in India. The literature on international trade suggests that the productivity of domestic manufacturing sector will rise through the effects of economies of scale, reallocation, competition, and spillover channels from trade participation. To study the net impact of these effects on productivity, we constructed trade related variables such as relative import price, import penetration and export intensity for a panel of 17 2‐digit organised manufacturing sector industries for the period 1980 to 2013. During this period, the Indian manufacturing sector witnessed considerable
liberalisation and openness coupled with an increase in manufacturing growth and productivity, especially in the recent decades. There is evidence of a shift in the composition of sectors—from traditional labour‐intensive products such as food, beverages, tobacco, and textiles, to modern‐skill and knowledge‐intensive industries such as chemicals, machinery, and transport equipment. This is accompanied by a noticeable growth in productivity, both labour productivity and total factor productivity, especially during the 2000s. The panel econometric estimation result, based on random effect modelling, reveals the presence of trade induced productivity gains in  manufacturing. The productivity enhancing effects of economies of scale, reallocation and spillover largely operate through imports and become prominent after 1–2 year lag. However, in the short period, there is some evidence
of dominance of negative economies of scale induced by import competition. Although we find a positive
association between exports and productivity during all selected periods, the relationship is found to be statistically significant only in the current period. Overall, we find trade linked productivity gains being channelled through imports, which persist over time. This reveals that the impact of trade on manufacturing productivity in India is not static but dynamic in nature.

URL: http://isid.org.in/pdf/WP198.pdf

Courtesy: ISID

Agricultural Land-use Change in Kerala, India: Perspectives from Above and Below the Canopy

Thomas A. Fox, Jeanine M. Rhemtulla, Navin Ramankutty, Corey Lesk, Theraesa Coyle, and T.K. Kunhamu.
Agriculture, Ecosystems and Environment, 245: 1-10. 2017

Despite the availability of a wide range of tools, measuring and explaining changes in land cover and land use in tropical regions can be extremely challenging. Kerala, India, is a biodiversity hotspot with a high population density and a long history of complex agricultural land-use patterns. Some reports suggest that agriculture in Kerala, which historically is rice paddy-wetland and agroforestry-based, is on the decline. However, the evidence is often anecdotal, especially with regards to smallholding homegarden agriculture. In this study we employ mixed methods, including remote sensing, quantitative household surveys, and semi-structured interviews, to unravel the complex land-cover and land-use changes occurring in Kerala.

Results indicate that, from a land-cover change perspective, agroforests are in dynamic equilibrium with other land covers, being cleared for roads and new buildings, but offset by the expansion of younger, less diverse agroforests into paddy wetlands. Yet beneath the canopy, agroforests are undergoing rapid land-use change not discernible using remote sensing. These changes include a reported decrease in the cultivation of 80% of Kerala’s primary crop species during 2003–2013, alongside a dramatic decline in chickens (from 12.5 to 2.6 per homestead on average) and cows (from 1.7 to 0.8). Over this period, no crop increased in cultivation. According to farmers, the primary drivers of this shift were declining profitability of agriculture in Kerala, labour shortages, unreliable weather, unfamiliar pests and diseases, and government policy.

Despite the undeniable move away from agricultural activity in homegardens, we conclude that these ecologically and culturally important systems are not disappearing, but rather evolving to meet the needs of a less agricultural Kerala. Our research highlights the value of using mixed methods for characterizing land-use and land-cover histories in tropical regions.

url – http://www.sciencedirect.com/science/article/pii/S0167880917301950
courtesy – SD


Packirisamy Natarajan, Mohammad Tanzeem Raza
Journal of Smart Economic Growth, Volume-2, No.-2, 2017

India, a nation of second largest population in the world is well becoming a largest nation in creating entrepreneurs. The creation of entrepreneurs depends upon the Doing Business policies, procedures and regulations. A business-friendly ecosystem is a pre-requisite for the growth and development of a nation. By considering the indicators of doing business namely- starting a business, getting electricity, dealing with construction permits, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation, this paper analytically investigate on ease of doing business in compliance with relevant regulations and procedures. This study also investigate the measures taken by the government to accentuate ease of doing business. The policy reforms by Government will serve as an incubator to make entrepreneurship viral in the country. It requires committed effort of all supporting institutions and primarily entrepreneurship compliance.
url – http://jseg.ro/ojs/index.php/jseg/article/view/27
courtesy – JSEG

Value-added disaggregated social accounting matrix for the Indian economy of the year 2007–2008

Barun Deb PalEmail and Jayatilleke S. Bandarlage
Journal of Economic Structures, 2017, 6:14

India is pioneer in constructing the social account matrices for its economy for various years, but limited efforts have been made to construct a SAM for India with detailed description about types labour input employed in various economic activities and subsequently the distribution of labour income across various households groups. To bridge this gap, we have constructed a 78-sector SAM for India which takes into account 48 types of labour input for economic activities and 80 types of households classes in India. Integrating the existing input–output database of the year 2007–2008, a 78-sector SAM of the year 2007–2008 and unit-level data published by National Sample Survey Office of India. This SAM differs from the existing 78-sector SAM in terms of its sectoral classification and especially the level of disaggregation of value-added and households account. Further, in this study we have illustrated some applicability of this SAM in analysing income inequality across various social groups of households in India and their contribution to the national income of India. It is observed from this SAM that the rural other social category of households constituted 17% of total population in India and contributed 13% of its net national income, whereas the special social category households of rural areas (SC, ST and OBC) contributed significantly lower in India’s NNP than their share in population. Hence, these categories of households in rural India remain unproductive than the other social category of households. Contrary to this fact, the urban counterparts of these social groups of households are more productive in India. We have also estimated the Gini coefficients corresponding to each social group of households as a measure of level of income inequality. Further, the SAM multiplier model has been applied to observe the impact of agricultural growth on rural income and income equality. The estimated Gini coefficients revealed the facts that the growth in paddy crops will lead to high increase with low income inequality among the SC and ST households, whereas for the OBC and other category households the same phenomena is observed corresponding to livestock sector.

DOI: 10.1186/s40008-017-0074-y
Cuortesy: Springer

Financial Frictions, Underinvestment, and Investment Composition : Evidence from Indian Corporates

Sonali Das , Volodymyr Tulin

IMF Working Paper No. 17/134, 2017

This paper studies private investment in India against the backdrop of a significant investment decline over the past decade. We analyze the potential causes of weaker investment at the firm level, using both firm-level financial statements and a novel dataset on firms’ investment project decisions, and find that financial frictions have played a role in the slowdown. Firms with higher financial leverage invest less, as do firms with lower earnings relative to their interest expenses. Consistent with the notion of credit constraints leading to pro-cyclical investment, we also find that firms with higher leverage are (i) less likely to undertake new investment projects, (ii) less likely to complete investment projects once begun, and (iii) undertake shorter-term investment projects.

URL: http://www.imf.org/en/Publications/WP/Issues/2017/06/08/Financial-Frictions-Underinvestment-and-Investment-Composition-Evidence-from-Indian-44939

Courtesy: IMF