ScienceGuy

Petrol prices were market-linked in 2010 and diesel later in 2014 for retail consumers. Although I do encourage and support this move as they would improve fiscal balance, make energy usage more sufficient and would be better for the environment as well. With market linking of prices, fuel witnesses frequent revisions to keep it aligned to the international prices. So, although post mentioned periods the prices officially were market-linked, and indeed frequent revisions of the prices were seen as compared to before, how dynamic this fuel price actually is? At the wholesale side, the effect of market-linking is clearly visible from the chart below. The first chart contains international oil prices in $/bbl and Rs/bbl. I plotted both of them to also get an insight into exchange rate effects. It can be seen that post subsidization, oil price hikes are felt strongly in Rupee than oil price declines. So, the oil price dips in $ are closely tracked in Rs as well, however, oil price hi

- Summarised from Constantino Hevia and Andy Neumeyer's chapter from   COVID-19 in Developing Economies The authors plotted Google mobility trends for places of work and for retail and recreation like restaurants, cafes etc which showed declines, however, heterogeneity was observed across economies (among both advanced and emerging) despite COVID being a global shock. This was believed to be due to different government policies with regards to social distancing. In economies where there exist effective containment policies, socio-economic interactions weren’t disrupted that much like in Taiwan and South Korea. The distancing measures were much stringent in countries like Italy, Spain and India, therefore, witnessed large mobility changes. In most countries, except for Sweden and the US, the contraction in the time spend working was found to be smaller than that spent on recreational activities. This difference was seen to be larger in emerging economies.

The macroeconomic flu is a temporary negative supply and demand shock, that is a temporary decline in output followed by a quick recovery. The growth rates might slide in one quarter but recover the shortfall in the very next too. In such cases, conventional policy actions from the toolbox suffice. H owever, this is not the case in a pandemic. The estimates from COVID-19 suggest large downslides which may even be prolonged. The most extreme scenario of a severe, temporary global pandemic presented by Warwick McKibbin and Roshen Fernando suggests average GDP loss of 6.7%, with an 8.4% loss for the US and the euro area. The size of the COVID shock would be determined by the strictness of measures by the governments to control the spread of the virus. This is because such measures would disrupt work process and therefore the supply chain. Example - Maersk, one of the largest shipping companies, has had to cancel dozen of container ships and estimates that Chinese factories

WITS data shows that the export share to China from India in 2018 stood at 5%. Imports, on the other hand, stood at 14.7% making China the largest import partner of India and that too by a big margin as the US occupying the second spot has an import share of 6.3%. For China in the same year, India's import share was around 0.9% and the export share was 3%. The USA occupied the largest export share with 19.2%.  This tells us that Chinese penetration into the Indian market and Indian dependence on Chinese trade is more important for India than it is for China. Trade war with China might backfire and have a bigger negative impact on India than it may have on China. In this aspect, I agree with the views of Dr Panagariya which I read in this article . As is also suggested in the Global Competitiveness Report, the investment might be a key factor at this time for the revival of developing and emerging economies.  This article shows that Chinese investments in some of the Indian Uni

Click here to read the compilation by the IMF containing summarized timeline and policy responses - Fiscal, Monetary etc

FDI would play an important role in the post-COVID revival of the developing world. World Bank's Global Investment Competitiveness Report 2019-20 discusses the FDI scenario before COVID and during the COVID times. It then goes ahead to suggest some possible ways through which the developing world can rebuild investor confidence. Click here to read the overview of the Global Investment Competitiveness Report written by me. Global Investment Competitiveness Report 2019-20 full report  is available here World Bank blog discussing the same - click here

Amongst top CO2 emitters (1960-2010) by absolute emissions stand these economies: 1. USA 2. China 3. Japan 4. Russia 5. India 6. UK 7. Canada 8. France 9. Italy  10. Poland To get some idea about the CO2 emission basis of these economies I plotted 3 graphs for each of them, 1. change in CO2 emissions (kt) and GDP growth rate against time 2. absolute CO2 emissions (kt) and GDP against time and 3. absolute CO2 emissions (kt) against GDP per capita. The document is available here . I plotted the change in CO2 emissions (in kt) and GDP growth rate with time to get a glimpse of how the growth of the economy depends on CO2 emissions. Further, reading the scale on the change of CO2 emissions axis and GDP growth rate simultaneously would give me an idea about the carbon efficiency of the economy. What can be seen from the plots is that most of the economies except India and China have highly synchronous GDP growth and change in CO2 emissions. Although causality cannot be esta

With international borders closed and Vande Bharat flights being the only respite, I am writing my experience of Vande Bharat flight flew on from London Heathrow to Delhi which I flew in mid-June 2020. I would describe my experiences mention the differences from the usual flights so someone who has to fly in recent future could be prepared in advance. Pardon my mistakes if any, and feel free to get in touch in case you feel that I could be of any assistance. My flight was to depart from Terminal 2 of the Heathrow airport. At the drop points of the cabs, I found many luggage trolleys. Post borrowing one trolley, I went inside the terminal. I was then told to go to the level-0 of the terminal. The terminal that one enters post leaving the cab-drop point is level-3. So, I took the elevator to level-0. At level-0, there was a long queue by Air-India. Upon joining the queue everyone was given an undertaking form which was required to be filled and submitted at the check-in counte

Outline: Shimer exercise Beveridge curve Behavior labour market variables in RBC and NK models Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

Outline: What are business cycles Trend and cyclicality of output HP-Filter Output gap vs Business Cycles Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

Outline: Key frictions and channels Frictions and emergence of a crisis state Appropriate policy responses in the presence of frictions Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

Outline: Sun-spots solutions in NK models Money, expectations and OLG models Monetary policy and time inconsistency Monetary Business Cycle models - Shopping time Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

Outline: Golden Rule capital stock and over-accumulation Ricardian equvivalence Overlapping-generations models Fiscal Policy in OLG, RBC and NK models Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

Outline: Little history NK model Taylor principle Model properties - Productivity and Monetary policy shocks and policy implications Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

Outline: View to think about cycles A simple dynamic macro model - RBC - Competitive equilibrium and Social Planner Model with uncertainty Propagation of shocks Click here to access notes. Notes are based on lectures by Prof. Wouter Den Haan, LSE

My review of the paper by Angus Deaton  A dult height is determined by genetic potential and by net nutrition, the balance between food intake and the demands on it, including the demands of the disease, most importantly during early childhood. Historians have made effective use of recorded heights to indicate living standards, in both health and income, for periods where there are few other data. Understanding the determinants of height is also important for understanding health; taller people earn more on average, do better on cognitive tests, and live longer. This paper investigates the environmental determinants of height across 43 developing countries. Unlike in rich countries, where adult height is well predicted by mortality in infancy, there is no consistent relationship across and within countries between adult height on the one hand and childhood mortality or living conditions on the other. In particular, adult African women are taller than is warranted by their low inco

Outline: VAR Moving average representation Identification Innovation accounting Impulse response. Forecast error variance decomposition Granger causality Click here  to access full notes Briefed notes here The notes are based on the lectures of Dr. Tatiana Komarova, LSE

Outline: Deterministic and Stochastic trends Co-Integration Spurious regression ECM Click here to access full notes Briefed notes here The notes are based on the lectures of Dr. Tatiana Komarova, LSE

Suppose there's a closed economy. Now imagine a household (economy) with two people A and B in which B always borrows money from A. Now the fact that B will have to pay back the debt next period, will it be a burden on the household (economy) as a whole? Since the economy is closed, for the household in entirety it doesn't matter. It's just that B will have to come up with the money and transfer to A, but the debt for the whole economy isn't a burden, its just transfer. So, similarly, today the government funds the deficit by borrowing. Generally, people who lent are rich so say, rich lent money to the government today. Now next period the government have to pay back the debt, so it will have to get the money. Suppose it raises taxes. So now the money will flow the middle-class to the rich. On aggregate, therefore, government debt will not be a burden. It's true that middle-class will have to give the money and rich would get the money, so its a burden in the se