Below is given the Table of Contents of the
Issues listed above:
Volume 56.
No 3. Oct-Dec, 2008
ARTICLES
/ 1
Income Nutrition Interface for the
Measurement of Poverty
In Defence of the Income Criterion Divyashri Sagar and Vidya Sagar
The growing divergence between
income and nutritional poverty in
India since 1973-74, when the
poverty estimation was based on the
synchronisation of the two concepts,
has led to a wide chasm between the
liberal development economists and
the other development scholars on
the correct way to measure poverty
and under nutrition. It is argued
here that a significant part of the
divergence arises by not including
explicitly the concept of dietary
energy requirement in this debate. A
calorie cutoff point as the sole
determinant for measurement of
poverty is inadequate for
populations engaged in a wide
variety of occupations requiring
various levels of calorie
expenditure and may not be valid
across all time and space
boundaries. In developing economies,
where structure of workforce is
changing rapidly, this may lead to
paradoxical situations. Given the
adequacy of income to sustain large
variation in calorie intake as it
comes clearly from the NSS data, the
equilibrium intake levels may be
left to the consumer beyond a
certain minimum level of income.
Divyashri Sagar, Global Decision
Management Advanced Analytical
Solutions, Citigroup, Bangalore.
Email:
divyashrisagar@yahoo.co.uk
Vidya Sagar, Professor (Retired),
Institute of Development Studies,
Jaipur.
Email:
sagarvidya@gmail.com
ARTICLES
/ 2
Purchasing Power Parity in South
Asia
A Panel Data Approach Abdullah M. Noman
The paper tests for PPP by
investigating the real exchange
rates of seven South Asian
countries. It employs two univariate
unit root tests, namely, the ADF and
the PP tests, and two panel unit
root tests, namely, the IPS and the
CIPS tests. The univariate tests
overwhelmingly fail to reject the
unit root null. The IPS test also
reinforces this result. However, the
CIPS test that accounts for
cross-section dependence produces
results that are able to reject the
null of non-stationarity in the
panel. The findings of the paper
support stationarity of the South
Asian real exchange rates and hence,
PPP seems to be a valid proposition
for the region vis-à-vis the US.
Abdullah M. Noman
School of Business Studies, South
East University, Dhaka, Bangladesh.
Email:
abdullab.norman@seu.ac.bd
ARTICLES / 3
‘Crisis’
in the Tea Sector :
A Study of Assam Tea Gardens Deepak K. Mishra, Vandana
Upadhyay and Atul Sarma
This paper attempts to analyse the
trends in production and employment
in the tea sector in Assam at a
disaggregated level. While much of
the discussion on the impact of
globalization on tea sector revolves
around trends in tea auction prices
and exports, the present study looks
at the post-reform changes in
production and labour use in the tea
producing districts of Assam. The
analysis of growth performance of
the tea sector clearly brings out
the fact that declining productivity
in the sector at the all India level
gets manifested in the tea gardens
of Assam much more pronouncedly than
in any other state or region. Within
Assam, while there have been some
gains in terms of area in few
districts, the dismal performance in
productivity growth has been all
pervasive, particularly in the last
few years.
In terms of growth of employment,
Assam’s performance has worsened in
recent years.
Although labour productivity had
increased relatively comfortably
during the 1980s, during the 1990s
labour productivity growth slumped
in many of the districts of Assam.
Employment elasticity has come down
in Assam in the nineties in
comparison to the eighties. At the
district level, it has declined for
almost all the districts during the
nineties. The slow growth in
productivity as well as in
employment has significant
implication for labour households
dependent on the tea sector.
Increasingly they find it difficult
to get absorbed in the tea sector,
their traditional sources of
livelihood.
Deepak K. Mishra, Associate
Professor, Centre for the Study of
Regional Development, Jawaharlal
Nehru University, New Delhi. E-mail:
deepakkmishra@yahoo.co.in
Vandana Upadhyay, Lecturer,
Department of Economics, Rajiv
Gandhi University, Itanagar,
Arunachal Pradesh.
nE-mail:
uvandanaa@yahoo.co.in
Atul Sarma, Member, Thirteenth
Finance Commission, Government of
India; Former Vice-Chancellor, Rajiv
Gandhi (Arunachal) University,
Itanagar, and
Former Professor of Economics,
Indian Statistical Institute, Delhi.
E-mail:
sarmaatul@yahoo.com
ARTICLES
/ 4
Understanding the Complexity of
Capital Structure
Decisions under Risk and Uncertainty Yamini Agarwal, K.C. Iyer and
Surendra S. Yadav
Capital structure decisions have
assumed strategic importance in the
changing business risk complexion.
The changing paradigms in the
financial markets, financial
institutions, regulatory frameworks
and objectives of a firm influence
the capital structure decisions. The
determinants of the capital
structure decision vary across
borders. The micro and macro
economic variables which influence
the decision making process have
rendered the past theories
irrelevant. The paper focuses on the
scholarly works which highlight the
importance, determinants and
developments in capital structure
decision-making process.
Yamini Agarwal, Vice-Chairman and
Senior Lecturer, Indian Institute of
Finance, Delhi, India; PhD Scholar,
Indian Institute of Technology,
Department of Management Studies,
Delhi, India; Assistant Editor,
Finance India, Delhi, India.
Email:
yagarwal@iif.edu
K.C. Iyer, Associate Professor of
Finance, Department of Management
Studies, Indian Institute of
Technology, Hauz Khaz, Delhi, India.
Email:
kciyer@dms.iitd.ac.in
Surendra S. Yadav, Professor of
Finance and Head of Department,
Department of Management Studies,
Indian Institute of Technology, Haus
Khaz, Delhi, India.
Email:
ssyadav@dms.iitd.ac.in
ARTICLES
/ 5
Efficacy of Law in Realising
Capability of
Factors of Production : A Study of
Extended Production Function from a
Panel of Small and Tiny Industries Shalini Singh, Bhupendra V. Singh
and Akhilesh K. Sharma
The absence of institution means
examination of dynamics under no
friction leaving actual capacity and
capacity realisation as one and the
same. The relative permittivity—the
ratio of relationships between the
two situations of institution
represented by written laws, is
quantified to capture its role on
the production function. A nested
CES production function is solved
for, with relative permittivity and
traditional one, using panel data
from the small and tiny industries.
It is found that written laws has a
significant impact on production
structure of industries due to the
relative permittivity. Policy
implications are also drawn from it.
Shalini Singh, Research Scholar,
Deptt. of Economics, BHU, Varanasi,
UP, India.
Email:
bhushalini@gmail.com
Bhupendra V. Singh, Reader, Deptt.
of Economics, BHU, Varanasi, UP,
India.
Email:
bhupendravsingh@gmail.com
Akhilesh K. Sharma, Research
Scholar, Deptt. of Economics, BHU,
Varanasi, UP, India. Email:
aksbhu2608@gmail.com
ARTICLES
/ 6
Competing Theories of Unemployment
and Economic Policies
Evidence from the US, Swedish and
German Economies Constantinos Katrakilidis and
Persefoni Tsaliki
The objective of the paper is to
evaluate the explanatory power of
three competing core
interpretations and economic
strategy approaches to unemployment.
The first is the neo-classical
hypothesis according to which the
rigidities in the labour market are
responsible for the presence of
unemployment. The second is the
Keynesian hypothesis according to
which the market system fails to
create adequate effective demand for
the full employment of labour.
Finally, the third is the
classical/Marxian model according to
which employment or unemployment are
depended on the dynamics of capital
accumulation. The econometric
analysis uses data from the US,
German and Swedish economies which
are characterised by quite diverse
labour market structures. The
results of empirical analysis
reveals that the explanatory content
of both the Keynesian and the
classical/Marxian core models fared
better than the mainstream approach.
Constantinos Katrakilidis, Persefoni
Tsaliki, Department of Economics,
Aristotle University of Thessaloniki,
Greece.
e-mail:
katrak@econ.auth.gr ,
ptsaliki@econ.auth.gr
ARTICLES
/ 7
Establishing Wagner’s Law in the
West Africa Monetary Zone (WAMZ):
Investigation Using the Bounds Test M. Adetunji Babatunde
This study tests Wagner’s Law (the
tendency for government activities
to expand along with economic
expansion) for WAMZ using annual
time series data between 1970 and
2005. It adopts the Bounds Test
approach proposed by Pesaran et al.
(2001) based on Unrestricted Error
Correction Model and Toda and
Yamamoto’s (1995) Granger
non-causality tests. Empirical
results from the Bounds Test
indicate that there exists no
long-run relationship between
government expenditure and output in
Nigeria, Gambia and Sierra Leone. In
addition, the Toda and Yamamoto’s
(1995) causality test results show
that Wagner’s Law does not hold for
over the period being tested for
Nigeria, Ghana, Gambia and Sierra
Leone. Although a long-run
relationship between government
expenditure and output in Ghana,
economic growth and government
activity were not found to reinforce
each other.
M. Adetunji Babatunde, Department of
Economics, University of Ibadan,
Ibadan, Nigeria. E-mail:
tunjiyusuf19@yahoo.com
COMMUNICATION
FOR DEBATE & RESEARCH / 1
Economics of Conference
Presentations
and Research Publications T.V.S. Ramamohan Rao
Two broad trends are discernible in
the context of the development of
scientific R&D. First, there is a
significant increase in conference
culture and the tendency of many
authors rushing the dissemination of
their discoveries. Second, there is
an increase in the willingness to
accept and finance such activities.
Clearly, both these features tend to
be sustainable only because the
parties involved in the transactions
feel that they have something to
gain commercially. The primary
purpose of this study is to examine
this nexus utilising a modified
principal agent model. The existence
of these mechanisms renders the
national wealth more volatile. Such
volatility can be minimised only if
firms, that undertake
commercialisation, are adequately
skilled and/or highly volatile
transactions can be screened out by
making it more expensive to
commercialise them. The least that
can be done is to discourage proven
losers over time if they fail to
self select.
T.V.S. Ramamohan Rao, Indian
Institute of Technology, Kanpur.
email:
rmrao@iitk.ac.in.
The author is solely responsible for
the views and analysis here.
COMMUNICATION FOR DEBATE AND
RESEARCH / 2
Does Ownership Affect Firms
Performance
Evidence from Large Firms of the
Indian Machinery Industry? Chandan Sharma
Machinery industry is one of fastest
growing industries and it is also
instrumental for various other
industries’ growth in India. In this
study, we compare technological
progress and technical efficiency of
large machinery industry firms. TFP
of firms is estimated using the
innovative technique of Levinsohn
and Petrin (2003), while technical
efficiency is measured by using
Battese and Coelli (1995) technique.
This study focuses only on the
post-reform period (1994 to 2006).
The findings are robust, however,
surprising in many aspects. The
results suggest that public sector
firms are on an average equally
productive as private sector firms
in the sample. A comparison between
domestic (Indian) firms and foreign
firms in terms of TFP suggest that
the latter group has an edge over
the former group, and more
importantly this edge has been
growing over the period. In terms of
efficiency also, results are
similar. Overall results suggest
that foreign firms are the best
performers in the industry, while
domestic private firms are the worst
performers.
Chandan Sharma, Faculty Member,
ICFAI Business School (IBS), Gurgaon,
India, and Research Scholar,
Department of Financial Studies,
University of Delhi, New Delhi.
E-mail-
chandanieg@gmail.com
COMMUNICATION FOR DEBATE AND
RESEARCH / 3
Does Subprime Mortgage Crisis in the
US Impact India?
An Exploration Tulasi Gopinath
The direct impact of subprime crisis
on India may be muted due to its
limited exposure.
However, reflecting contraction of
the US and the global slowdown in
the wake of the crisis, the indirect
knock-on impact on India could be
visible through four basic channels
of financial sector, balance sheet,
external trade and inflation. While
the conduit of financial sector
channel is through equity and
foreign markets, balance sheet
channel encompasses government,
corporate and banking sectors. The
paper finds evidence that adverse
impact via financial sector and
trade channels could be
non-insignificant, manifest in terms
of volatility in equity prices and
exchange rate on the one hand, and
decelerating exports embodying the
second-order affects transmitted
through shrinking non-US export
markets, on the other. However,
adverse impact through balance sheet
channel may be muted for the
government sector and the banking
sector, while the corporate sector
could be under pressure. Thus, on
balance, the overall impact of the
US subprime crisis on the Indian
economy may be not very significant.
Tulasi Gopinath, Assistant General
Manager, Banking Policy Division,
Department of Banking Operations and
Development, Reserve Bank of India,
Mumbai.
E-mail:
gopinathtulasi@yahoo.co.in
REVIEW
ARTICLE / 1 Economic Geography
Economic geography is a relatively
new subject for many researchers in
the field of economics. This brief
note is published here with the
objective of acquainting the
researchers in economics with the
broad contours of the discipline of
economic geography and to induce
them to undertake intensive research
on the issues of economic geography.
This note and the bibliography given
is only illustrative and it is
proposed to publish more detailed
papers on ‘Economic Geography’ in
the next issue of our Journal.
The Nobel Prize of 2009 has been
awarded to Professor Paul Krugman,
who has done good pioneering work in
the field of ‘Trade and Geography’.
We would publish a paper on the
contributions of Nobel Laureate
Professor Paul Krugman, in the next
issue of the Journal.
The contents of this note have been
drawn from different sources, such
as, select books, select papers and
Internet references. Survey articles
and further references on the theme
of ‘Economic Geography’, are welcome
from the scholars in this field.
