India's Rising Role in Asia
Mukul G. Asher

In this lecture, the author brings out the multiple dimensions of the rising role of India in
Asia. He argues that India has been integrated in the Asian region to a much greater extent than what is normally perceived. He advocates that India has many opportunities
forcooperation and further integration, despite the fact there are many areas in which Asian countries compete with each other. He endorses the proposal made by Japan, for strengthening the "Comprehensive Economic Partnership in East Asia (CEPEA)", with the participation of ASEAN plus Six, viz. India, China, Japan, Korea, Australia, and New Zealand. He urges the Indian policy maker, the private sector, the intelligentsia and the media to play a proactive role in promoting the process of India's integration in Asia.

The author is Professor of Public Policy, National University of Singapore and Adjunct Senior Fellow, RIS, New Delhi. Email: sppasher@nus.edu.sg 
 

Creating Rural Wealth Using ICT and Wireless
A Franchising Model Using Micro-equity
Raj Reddy

In this lecture, Dr. Raj Reddy gives a blueprint of an innovative scheme for eradicating rural poverty. Recognising the fact that India is essentially a country dominated by the rural sector, he advocates that priority attention needs to be given to the task of capability building in the rural sector. Invoking the Chinese Philosopher's saying that "it is better to teach as to how to do fishing rather than giving a fish a day", the author argues that the most modern technologies of ICT and wireless systems could be fruitfully utilised to empower the rural youth to create additional quality jobs and wealth for their own welfare. He advocates a total 'systems approach' for disseminating knowledge and new skills among the rural youth, by the use of ICT and for encouraging new rural entrepreneurship through the provision of 'microequity', among others.

The author is University Professor, Carnegie Mellon University, Pittsburg, USA.
Email: dattruddar@rediffmail.com
 

Measuring Human Poverty by Population and
Factor Decomposable Indices
Satya R. Chakravarty and Amita Majumder*

The human poverty index concentrates on deprivations in the living standard of a population in terms of failures in three basic dimensions of life, namely, decent living standard, educational attainment rate and life expectancy at birth. This paper considers a global deprivation index using an arbitrary number of dimensions of human life. If we consider only the three basic dimensions of well-being, a member of this family becomes increasingly related to the human poverty index. For any partitioning of the population into two or more groups, with respect to characteristics like age, sex, race, region etc., we can calculate the percentage contributions of deprivations in different groups and hence identify the groups which are more affected by deprivation. This becomes extremely important from a policy perspective. Using a factor decomposability condition we can similarly isolate the dimensions which are major contributors to global deprivation. We also provide an empirical illustration of the index using Indian data.

Satya R. Chakravarty, Economic Research Unit, Indian Statistical Institute, Kolkata, India. E-mails: satya@isical.ac.in,  rc_satya2@yahoo.com 
Amita Majumder, Economic Research Unit, Indian Statistical Institute, Kolkata, India. E-mail: amita@isical.ac.in 
 

Governing a Democracy
Constrained Discretion for Macroeconomic Policy
Ashima Goyal

Representation of diverse interests is a strength of democracy but conflict of interests makes it slow moving. Rules are feasible that use the strengths of a democracy and its structure and history as enforcement devices, mitigate its weaknesses, and substitute incentives for discretionary controls. Reforms give an opportunity to restructure rules towards constrained discretion that respects these principles. In a developing democracy the poor are the largest vote block, but they discount the future heavily, and future generations are not present to voice their interests. Strategic interaction between fiscal and monetary authorities and economic agents, can lead to the creation of more populism than is socially optimal. The tradeoff through which this occurs is that between populism and growth. The paper explores potential rules that implement macroeconomic policy coordination for such a democracy, forcing a long-term perspective, yet retaining flexibility.

The author is Professor, Indira Gandhi Institute of Development Research, Mumbai. Email: ashima@igidr.ac.in 
 

Access Demand for Telecom Services in India
Evidence for Household Determinants and Policy Implications for Goa State
M.R. Narayana

This paper estimates the socioeconomic and demographic determinants of access demand for telecom services in India by using a small household survey data of Goa State in Western India. Estimates of a binary logit model are used to compute the probabilities, marginal effects, and elasticities of household access demand. To gain further insights, socioeconomic determinants are estimated by rural and urban Goa. The results offer evidence for unique similarities and essential difference in the nature and impact of determinants in regard to subscribers' sex, social caste, education level, type of occupation, income level, family size, nature of family, and location of friends and relatives. About 83 per cent of computed probability of access demand is explained
by these variables. Income elasticity of probability for subscription is remarkable. A new method of translating the responses of households to hypothetical questions to price changes into elasticities offers support for international evidence on "elasticities increase with distance." The empirical results are useful for design of a selective and focused promotional policy for access demand for telecom services in rural and urban Goa and elsewhere in India.

The author is Professor of Economics, Centre for Economic Studies and Policy Institute for Social and Economic Change (ISEC),
Bangalore, India. Email: mrn@isec.ac.in  , mrnarayana@yahoo.com 
 

Bootstrap Estimate of a Behavioural Stock Price Model
N. Lalitha and D.N. Rao

A behavioural stock price model that incorporates inertia in investor behaviour is developed and estimated. The estimates are consistent but biased, because of the presence of lagged dependent variables and errors-in-variables. The method of recursive bootstrap overcomes these problems and seems to provide a more accurate estimate of the behavioural model.

N. Lalitha, Department of Economics, Shyama Prasad Mukherjee College, University of Delhi, New Delhi, India. Email: lalitha_nat@yahoo.co.in 

D.N. Rao, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India.
Email: dnrao@mail.jnu.ac.in  , dnrao@indiatimes.com 
 

COMMUNICATIONS FOR DEBATE AND RESEARCH / 1

The Nominal Income Targeting Rule of Monetary Policy
and its Stability Properties in the Open Economy
Baotai Wang*

Recently there has been increasing interest in nominal income targeting rule, one of the
possible policy rules for conducting monetary policy, with much of this interest focusing on whether or not the nominal income targeting rule would result in a dynamically stable process for output and inflation. The discussions so far have been mainly conducted within the context of the closed economy. Conflicting conclusions on the stability properties of such a policy rule have been derived from different specifications of the formation of inflation expectations in the Phillips curve and the timing with which the interest rate affects output and inflation. The present paper extends the discussions to the open-economy case. Results of this study show that stability for output and inflation prevails under the nominal income targeting rule of monetary policy in a general open-economy model when the asymmetric effects of the interest rate on output and inflation and the different formations of inflation expectations are taken into the analysis.

The author is Economics Program, University of Northern British Columbia, 3333 University Way, Prince George, British Columbia,CANADA. Email: wangb@unbc.ca 

COMMUNICATIONS FOR DEBATE AND RESEARCH / 2

Knowledge Spillover and Information Sharing
The Case of Uncertain R&D*
Shantanu Banerjee and Arijit Mukherjee

We show the effects of "knowledge spillover at the R&D stage" and "no knowledge spillover at the R&D stage but information sharing after R&D" on the equilibrium R&D investments. For large knowledge spillover, the equilibrium R&D investments are higher under no knowledge spillover but information sharing compared to knowledge spillover at the R&D stage. However, these two regimes can generate the same outcome for small knowledge spillover.

Shantanu Banerjee, Lancaster University, UK.
Arijit Mukherjee, School of Economics, University of Nottingham, University Park, Nottingham, NG7 2RD, UK. E-Mail: arijit.mukherjee@nottingham.ac.uk 

BOOK REVIEW / 1
Poverty Mapping in Rajasthan-P.C. Bansil
(Concept Publishing Company, New Delhi, Price: Rs. 750, pp.366).

Reviewed by Dr. V.B. Jugale, Professor of Economics, Shivaji University, Kolhapur
E-mail: vbjugale@gmail.com


BOOK REVIEW / 2
Annals of a Central Bank
Meticulously Documented
History of Reserve Bank of India: Volume 3, 1967-1981,
(published by Reserve Bank of India, Mumbai, 2005, Price Rs.1300,pp.: xxxii+1197)

Reviewed by Dr. N.K. Thingalaya, Emeritus Professor, Justice K.S. Hegde Institute of Management, Nitte and former CMD of Syndicate Bank