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1. Fiscal Transfers and Inflation: Evidence from India

Author:
Girish Bahal and Anand Shrivastava
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
Controlling for monetary policy, government transfers are potentially inflationary. This, however, may not be true when the economy is demandconstrained. Using a panel data of 17 Indian states over 30 years, we show that government transfers via welfare programs do not lead to inflation. For identification, we use a narrative shock series of transfer spending that is based on the introduction of new welfare programs. We then look at a specific program, NREGA, which has been shown to increase rural wages, and show that its implementation did not increase inflation.
Topic:
Economics, Government, Labor Issues, Monetary Policy, Employment, Inflation, and Demand
Political Geography:
India

2. Demand-determined potential output: a revision and update of Okun’s original method

Author:
Claudia Fontanari, Antonella Palumbo, and Chiara Salvatori
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper challenges the mainstream view of potential output, and enquires into the supposed effects of Great Recession on potential growth. We identify in the demand-led growth perspective a more promising theoretical framework both to define the notion and to gauge the long-term effects of a demand slow down. Based on the poor reliability of standard estimates of potential output, we also propose an alternative calculation. This is based on an update of Arthur M. Okun’s original method for estimating potential output, which, differently from the estimation methods currently in use, does not rely on the notion of NAIRU, thus being immune to its theoretical and empirical shortcomings. Our calculation, based on a re-estimation of Okun’s Law on US quarterly data, shows both how far an economy generally operates from its production possibilities, and how much potential growth is affected by the actual growth of demand over time. These wide margins for expansion of actual and potential output growth imply that a determined policy of demand expansion would create, given time, the very capacity that justifies it.
Topic:
Economics, Global Recession, Economic growth, Macroeconomics, and Demand
Political Geography:
United States and Global Focus

3. An Exploration of Factors Shaping Technology-Upgrading Efforts in Mozambican Manufacturing Firms

Author:
Alex Warren-Rodriguez
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper presents an analysis of factors shaping technology-upgrading efforts in the Mozambican manufacturing sector. It uses firm-level data to examine these issues for the metalworking and light chemicals sectors, using Logit regression analysis to identify factors associated with firms’ decisions to engage in technology-upgrading efforts in three areas: (i) product development; (ii) production technology development aimed at upgrading existing equipment or purchasing entirely new manufacturing technologies; (iii) and process engineering. In line with much of the literature on industrial organization and the microeconomics of technology change, this paper finds that existing production and technological conditions in manufacturing firms do play an important role in shaping their technological efforts. However, this association is not always linear, cumulative or uniform across the various relevant spheres of manufacturing, underscoring the multifaceted nature of technology change at this level. Moreover, factors identified in the literature as being instrumental in shaping technology development efforts, such as skills or foreign ownership, play no role in dynamics of this kind in Mozambique. At the same time, other factors that have received less attention, such as the ability of firms to engage in technology cooperation arrangements or the role played by demand and market conditions appear as important factors shaping these technology-upgrading efforts. Altogether, these findings serve to underscore the importance of defining policy interventions for private sector development that go beyond investment climate concerns and take into account issues such as the promotion of linkages, technology cooperation and demand/market management considerations.
Topic:
Science and Technology, Demand, Manufacturing, and Private Sector
Political Geography:
Africa, Mozambique, and Sub-Saharan Africa

4. Finding the Money: Informal Credit Practices in Rural Afghanistan

Author:
Floortje Klijin and Adam Pain
Publication Date:
06-2007
Content Type:
Research Paper
Institution:
Afghanistan Research and Evaluation Unit (AREU)
Abstract:
It is widely believed that there is a strong demand for credit in Afghanistan and that much of this demand is unmet, justifying a major programme in microcredit provision. But there is very little understanding of the extent and the workings of informal credit systems, particularly outside opium poppy growing areas. Is there such an absence of credit available to poor rural households as is assumed? Do microfinance and informal credit respond to the same needs? Is informal credit simply the same thing as formal credit, except that it takes place outside formal institutions? And if there is more informal credit available than is believed, what does this mean for the development and role of formal credit systems? These key questions informed a detailed anthropological study of informal credit practices in three contrasting villages in Herat, Ghor and Kapisa. Drawing from a detailed presentation of eight households case studies, and amplified with addition case material, a number of key conclusions can be drawn from the findings.
Topic:
Development, Economics, Monetary Policy, Microcredit, Rural, Money, Demand, and Credit
Political Geography:
Afghanistan and South Asia