Below is given the Table of Contents of the
Issues listed above:
Volume 58. No
4. January-March 2011
ARTICLES / 1
Markets with Search
Frictions*
The Royal Swedish Academy of
Sciences
This technical background paper is
prepared by the Economic Sciences
Prize Committee of the Royal Swedish
Academy of Sciences, for bringing
out the main contributions made by
the distinguished recipients of the
Nobel Prize, in the year 2010. The
Nobel Prize was shared by three
eminent scholars, viz., Peter
Diamond, Dale Mortensen and
Christopher Pissarides, who have
made fundamental contributions to
the innovative theme of search and
matching theory, including the
analysis of price dispersion and
efficiency in economies with search
and matching frictions as well as
the development of what has come to
be known as the modern search and
matching theory of unemployment. The
process of ‘search and matching’,
that constantly takes place between
the buyers and the sellers, is found
to be creating some ‘frictions’,
which influence the market
functioning, price determination,
price dispersion, efficiency in
economies and government
intervention. These seminal
contributions have also led to the
formulation of what has come to be
known as the ‘search and matching
theory of unemployment’. The paper
also brings out as to how the
original formulation of the search
and matching theory has inspired
many applications, in a variety of
fields, such as, issues in monetary
theory, public finance, housing
markets, financial economics, urban
markets and even in the unusual
field of marriage markets.
This survey type of paper is
published here with the permission
of the Nobel Prize Committee, with
the basic objective of motivating
our readers to use some of the
issues presented in the paper for
teaching and further research.
Christopher A. Pissarides,
Department of Economics,
London School of Economics and
Political Science, London, UK.
http://personal.lse.ac.uk/pissarid
ARTICLES
/ 2
Sustaining India’s High Economic
Growth Does Human Capital Formation
Matter?
B.B. Bhattacharya and Seema
Bathla
In the backdrop of a high rate of
economic growth that India has been
experiencing for quite some time,
this paper estimates total factor
productivity growth to explore
whether the differences in the
levels of education and skill
formation of workforce could explain
differential productivity and growth
among economic sectors. If this is
the case, then what implications it
has in terms of improving human
capital formation and hence
accelerating or at best sustaining a
high growth momentum in each sector
in the long run. It also explores
the otentials for utilising the
demographic dividend in India.
B.B. Bhattacharya,
Former Vice-Chancellor, Jawaharlal
Nehru University, New Delhi.
Email:
bb.bhattacharya1@gmail.com
How a Firm can Optimise
Profit in the Global Economy Vinay Bharat-Ram
The text book concept of profit
maximisation of the firm in a closed
economy is examined in the context
of the global economy. New variables
such as changing exchange rates,
varying interest rates, the import
substitution of components in a
product, and multiple demand
functions arising from the domestic
and global markets are factored into
the determination of profit
maximisation. In the process, which
components of a product to make, buy
locally or import and the total
quantity to produce for the domestic
market or export are ascertained. A
dynamic model to demonstrate this
has been developed based on the
experience of emerging s well
as developed economies. This is
supported by a case study from a
semiconductor project for India.
Vinay Bharat-Ram,
DCM Limited and The Indian Institute
of Technology, Delhi.
E-mail:
dcmltd@vsnl.com
ARTICLES
/ 4
Investment Strategies in a New Mixed
Market with State-owned and Labour-managed
Firms
Kazuhiro Ohnishi
The former study discusses the
perfect equilibria of a
continuous-time model of the
strategic investment decisions of
two profit- aximising private firms
in a new market and suggests that
the steady state of the game is
usually on neither firm’s steady
state reaction curve; that is, there
are early-stopping equilibria where
neither firm invests up to its
steady state reaction curve. This
paper considers a continuous-time
dynamic model of the strategic
investment decisions of a
state-owned welfare-maximising
public firm nd a labour-managed
income-perworker- maximising firm in
a new mixed market. The paper
studies the optimal levels of
preemptive investment for the
long-run structure of the mixed
market. The paper then constructs a
set of perfect equilibria of the
continuous-time dynamic model.
Kazuhiro Ohnishi,
Osaka University and Institute for
Basic Economic Sciences,
Osaka, Japan.
E-mail:
ohnishi@e.people.or.jp
ARTICLES
/ 5
Financial Crisis
Indian Economic Growth and External
Sector
D.K. Nauriyal and Bimal Kishore
Sahoo
This paper empirically examines the
impact of current worldwide
recession on India’s growth. The
data for this study were compiled
from RBI and Central Statistical
Organisation (CSO). The paper has
applied regression technique with
GDP as dependent variable, while
exports, imports, FDI and FII were
taken as independent variables.
Prior to regression analysis, all
the variables are tested for
stationarity, applying Augmented
Dickey-Fuller (ADF) test. The data
sets were also tested for
seasonality by applying auxiliary
regression. Because of the problem
of multicolinearity among the
independent variables, three models,
dropping one of the highly collinear
variables, were estimated. The
results suggest that financial
crisis has adversely impacted
India’s GDP although imports,
exports and FDI were found to have
exercised stimulating influence
through technological spillover and
other externalities. The paper
suggests that recovery of global
economy is extremely important for
Indian economic growth although the
effects of global slow down could be
minimised through the use of
stimulant fiscal and monetary
measures.
D.K. Nauriyal,
Professor, Department of Humanities
and Social Sciences, IIT Roorkee,
Email:
dk_nauriyal@yahoo.com
Bimal Kishore Sahoo,
Research Scholar, Department of
Humanities and Social Sciences,
IIT Roorkee, Email:
bimalkishore.sahoo@gmail.com
ARTICLES
/ 6
Inequality in Infrastructure and
Economic Development
Interrelationship Re-examined
Alpana Kateja and Nitu Maurya
The study attempts to analyse the
inequality in infrastructure and
economic development on the basis of
composite indices prepared with the
help of principal component analysis
(PCA) for 18 major states in India,
at four different points of time:
1980-81, 1990-91, 2000-01 and
2004-05. It further examines the
relationship between infrastructural
facilities and the level of economic
development which is particularly
crucial in the context of
transforming the Indian economy. The
results are significantly
conclusive. First, there is
significant variation in
infrastructural facilities across
the states. Second, infrastructural
facilities play an imperative role
in the development of states.
The authors are grateful to Prof.
Arup Mitra,
Institute of Economic Growth, Delhi
and Prof. M.L. Adhikary,
Burdwan University,
West Bengal for the continuous
guidance and incisive comments.
Alpana Kateja,
Professor, Department of Economics,
University of Rajasthan, Jaipur.
Email:
alpanakateja@gmail.com
Nitu Maurya,
Research Scholar, Department of
Economics,
Banaras Hindu University, Varanasi.
Email:
nitu12sept@gmail.com
ARTICLES
/ 7
Social Cost-Benefit Analysis
A Case Study of Pollution Intensive
Industries
Indrajit Bairagya and Saumya
Chakrabarti
Industrialisation is considered as
the key solution for the problem of
unemployment in developing
countries. However, whilst
industrial expansion promotes income
and employment it may also cause
resource degradation and
environmental damage. The latter, in
its turn, adversely affects income
and employment potentials. Social
cost-benefit (SCB) analysis provides
the methodology for assessing the
net benefits of industrialisation
taking into account its impact on
the environment. This paper conducts
such an analysis using three sponge
iron factories in Bankura district
of West Bengal as a case for study.
In this particular case, net benefit
in current year (NBCY) and net
present value benefit (NPVB) have
been found to be highly dependent on
industrial producers’ surplus. If we
include the producers’ surplus in
the calculation of NBCY and NPVB,
the value is positive, otherwise it
is negative. However, there is no
guarantee that the producers’
surplus will be reinvested in that
particular firm or region. If the
producers’ surplus is not reinvested
in that particular region, it can be
concluded that such kind of
industrial activity is generating
higher social costs than benefits
for the local economy after
appropriate internalisation of
externalities. Moreover, this study
may provide a case to the
policymakers to suggest alternative
policies regarding the
industrialisation involving
pollution intensive industries.
Spatial Distribution of Health
Workforce
and Health Care Services
An Inter and Intra Country Analysis*
Sailabala Debi
The spatial distribution of health
workforce for 152 countries shows
that the distribution in the density
of HWF among the LD countries is
most imbalanced, in MD countries is
more imbalanced and in HD countries
it is least imbalanced. Significant
correlation was found between health
workforce on the one hand and
IMR,MMR, LEB, communicable diseases,
birth attended by health staff,
immunisation and prevalence of HIV
on the other hand. The paper
suggests that in stead of universal
policy to meet the specific needs of
a specific region, target- specific
and need based policy may be more
helpful for proper health manpower
planning.
* This paper was presented at The
2008 Berkeley Conference on the
Global Health Workforce: From
Evidence and Research to Public and
Health Care Industry Policy, held in
Berkeley, California, April 4-5,
2008.
Sailabala Debi,
Former Director and Professor,
Centre for Multi Disciplinary
Development Research (CMDR),
Dharwad, Karnataka, India.
Email: s_debi_99@yahoo.com
COMMUNICATION FOR DEBATE & RESEARCH
/ 1
Women and Inclusive Growth
Vibhuti Patel
In spite of claim of ‘gender
inclusive growth’ by the Eleventh
Five Year Plan (2007-2012), the mass
of Indian women have not only been
bypassed but also marginalised in
the growth process. Real wages of
mass of women have declined. Due to
withdrawal of the state from social
sector, women’s work burden in
unpaid care economy (cooking,
cleaning, nursing, collecting
fuel-fodder- ater, etc.) has
increased manyfold. Subordinate
status of women manifests in
declining child sex ratio i.e.,
‘missing girls phenomenon’,
deteriorating reproductive and child
health, feminisation of poverty,
increased violence against women,
enhanced mortality and morbidity
among girls and women and deplorable
condition of elderly women and women
in difficult circumstances.
Government schemes such as Mahatma
Gandhi National Rural Employment
Guarantee Scheme, Jawaharlal Nehru
National Urban Renewal Mission,
Microfinance Movement and Mid Day
Meal Scheme have brought the poor
women from the level of starvation
to subsistence but not to human
development. For gender inclusive
growth, the state needs to play more
proactive role through gender
budgeting and gender mainstreaming
in the Indian economy.
Vibhuti Patel,
Director, P.G.S.R.; Prof. & HOD,
Department of Economics,
SNDT Women’s University, Mumbai.
Email
vibhuti.np@gmail.com
REVIEW ARTICLE / 1
Encircling the Seamless
India, Climate Change and the Global
Commons
(Author: A Damodaran, pp.
xxi+347, New Delhi: Oxford
University Press, 2010)
Reviewed by M.V. Nadkarni,
Hon. Visiting Professor, ISEC,
Bengaluru, Karnataka
REVIEW ARTICLE / 2
Agricultural Growth in India
Role of Technology, Incentives and
Institutions
(Author: A. Vaidyanathan, New
Delhi: Oxford University Press,
2010)
Reviewed by G.S. Bhalla,
Professor Emeritus, Centre for
Regional Development,
Jawaharlal Nehru University, New
Delhi
REVIEW ARTICLE / 3
The Dynamics of Competition
Understanding India’s Manufacturing
Sector
(Authors: Pushpangadan K. and N.
Shanta, pp: 151+viii, New Delhi:
Oxford University Press, 2009)
Reviewed by Dr (Mrs) T.A. Bhavani,
Professor in Economics,Institute of
Economic Growth,
Delhi University, Delhi
REVIEW ARTICLE /
4
Employment Role of Micro-enterprises
in Himachal Pradesh
Theoretical and Qualitative
Assessment
(Author: Vinod K. Anand, pp:
195, Shimla: IIAS 2010)
Reviewed by Madhu Bala,
Faculty of Economics, Indira Gandhi
National Open University, New Delhi
