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

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Determinants of Export Decision of Firms

This paper contributes to the more recent strand in the analysis of trade flows that uses data on exports of individual firms. In all countries of the world, relatively few firms participate in world trade, thus suggesting that besides country level barriers to trade, characteristics of a firm such as its size and productivity are relevant for participation in trade. Using firm level data, this study attempts to model and estimate the decision of Indian firms on their participation in trade. Firm heterogeneity is an important determinant of the decision to export. Exporting firms are significantly larger, more r&d-intensive, low wage-intensive, more productive and more profitable than non-exporting firms. The multinomial results reveal that the probability of survival of new firms in export markets is lower when compared to those which have been exporting in the previous years.

Price Indices and Inflation Rates

With inflation shooting up, it is an appropriate time to critically discuss the quality of India's inflation statistics. This article first discusses the official wholesale and consumer price indices and the impact of not regularly incorporating new products and changes in quality, and related deficiencies. It also draws on an official United States commission report that studied the implications of productivity changes for measuring inflation. The paper concludes with suggestions for revising the procedures for collecting and compiling price information and also recommends preparation of a new producer price index to replace the official Wholesale Price Index and, in addition to the consumer price indices, the compilation of an annual "cost of living index".

Poverty Lines in India: Reflections after the Patna Conference

In assessing India's experience with the definition and use of poverty lines, one has to keep in mind their normative and monitoring roles. After reviewing the evolution of poverty lines in India from a historical perspective and critically discussing some issues relating to current official poverty lines, this paper assesses whether it makes sense to anchor these lines in average energy norms. It concludes with a new approach to the measurement of poverty, besides providing some suggestions for broadening its conception and commenting on some of the current poverty alleviation policies.

China, India and the World Economy

Among countries with at least 10 million people in 2003, China and India have been growing very rapidly since 1980. Their rapid growth has had a significant impact on the world economy. After describing the two basic channels, namely, import demand and export supply, through which the growth of a country influences growth of the rest of the world and vice versa, the paper turns to its theme, namely, the influence of the growth of China and India. China is integrated to a greater extent than India with the world economy. Although India has succeeded in becoming a major destination of global outsourcing and in exports of information technology enabled services, it lags behind China in the competition to become a global manufacturing hub, though it is catching up. India's advantage over China lies in its vibrant democracy and the legal and financial systems. The paper concludes that whether or not India overtakes China in the next two decades, it is clear that both countries will be economic powerhouses in the medium term, and undoubtedly, their growth will have significant impacts on the world economy.

To 'Ustad', with Love

B S Minhas, who died on August 30, was a distinguished economist and a down-to-earth policy analyst. Many of his research papers remain classics and many of his observations on policy two and three decades ago remain relevant even today. Minhas was also one of unimpeachable character and integrity who was not afraid to speak his mind, not infrequently in blunt language. The quality of his mind and his ability to convey the unvarnished truth without fear of consequences earned him the respect of politicians in and out of power.

Modelling of Foreign Capital Flows and Reserves: Further Response

Capital Flows and Reserves Further Response NIRVIKAR SINGH, T N SRINIVASAN usually defined as a balanced growth path The second round of comments from Sen (2005) on Singh and Srinivasan (2004, 2005) suggests that some points of our paper apparently need further clarification. In doing so we distinguish between possible errors of logic and matters of interpretation and judgment.

Exchange Rates, Deficits and Capital Flows

Exchange Rates, Deficits and Capital Flows T N SRINIVASAN, NIRVIKAR SINGH Lal, Bery and Pant (2005, hereafter LBP) assert that

Foreign Capital, Inflation, Sterilisation, Crowding Out and Growth

Much of the policy debate on India's fiscal deficits, exchange rate management and reserves management policies is either model-free or uses ad hoc models. In order to understand some of the puzzles in India's current macroeconomic situation, a coherent intertemporal model is required, in which both private and public savings and investment behaviour are behaviourally specified, and growth, government deficits and other macroeconomic variables are determined in equilibrium. The goal here is to provide some starting points for further theoretical analysis, which could then be used for empirical work that could have policy relevance.

India's Statistical System

The National Statistical Commission should be commended for its broad, 'fivefold' remedial approach to the problems besetting India's statistical system. But its failure to offer any methods for judging the adequacy, timeliness and accuracy of statistical data and to undertake cost-benefit analyses of its concomitant recommendations undermines the utility of its work. Without such information, how can the government decide how to apportion its scarce resources among competing priorities?

Remembering S Guhan

T N Srinivasan SANJIVI GUHAN, who passed away in Chennai in February, was are markable person whose career spanned a wide spectrum: an IAS officer of the Tamil Nadu cadre who served with great distinction in several capacities at the centre and the state, India's executive director-alternate at the World Bank, senior economist of the Brandt Commission, professorial fellow at the Madras Institute of Development Studies and a member of the governing board of Kalakshetra. As a civil servant he worked for many prominent politicians and earned their respect as well as affection. Although he was a statistician by training, he was an economist by practice and instincts. His formidable capacity to analyse issues logically and coherently and his fammilitary not only with the literature in economics but also in moral and political philosophy enabled him to get to the core of any economic problem without being distracted by excessive use of a purely technical apparatus. He was sufficiently at home in Sanskrit and Tamil literatures to quote from both as needed. He and his wife Shanta were patrons of the arts who counted many artists, including the late, legendary, Balasaraswathy and her family, as personal friends His unimpeachable integrity and genuine concern (in word and deced for the welfare of the poor arc chracteristics shared by few. His death has created a void that is very difficult, if not altogether .impossible, to fill.

Indian Development Strategy

Indian Development Strategy T N Srinivasan ASHOK RUDRA (July 25) chides me for not distinguishipg public ownership from public intervention. A distinction without an essential difference is not analytically useful. Without getting into various dimensions of ownership and property rights, let me just say I was implicitly defining an owner as the residual claimant of the net output from an asset. My point was and is simply that, but for the exceptions noted in my earlier article, almost anything that the government can achieve with public ownership it can do by an appropriately chosen set of interventions without ownership. Whether the state has autonomy to intervene in a way that goes against particular interests is certainly an important issue on which there is a vast literature, particularly as it relates to Indian political economy. But a state that cannot intervene to achieve objectives that are against dominant interests is unlikely to be a state that can achieve the same objectives through public ownership brought about either by nationalisation of existing private enterprise or by public investment. I was contrasting alternatives to ownership for a state that can intervene or own or do both in some combination. If its 'class character' precludes intervention of the kind I was talking about, I submit it cannot 'own' either.


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