Jayati Ghosh’s Blog

It is generally perceived that India’s growth trajectory has been consumption-led. Many of the enthusiastic international assessments of future economic growth prospects in India are based on the anticipation of the massive domestic market likely to be created by India’s large and dominantly young population. This perception has been enhanced by the fact that consumption has been a significantly high share of GDP (at 55-58 for several decades), while net exports have not really emerged as a major growth impetus other than for some services. Meanwhile, investment rates, which increased in the decade of the 2000s, have declined and stagnated…

The international-development sector has become fixated on calculating financing gaps. Hardly a day goes by without new estimates of the funds low- and middle-income countries (LMICs) need to meet their climate targets and achieve the United Nations Sustainable Development Goals (SDGs). The Independent High-Level Expert Group on Climate Finance, for example, estimates that developing and emerging economies (excluding China) need $2.4 trillion annually by 2030 to close the financing gap for investments in mitigation and adaptation. Achieving the SDGs would require an extra $3.5 trillion per year. Similarly, the UN’s 2023 Trade and Development Report suggests that LMICs need roughly $4 trillion per year to meet…

Once again, low and middle income countries (LMICs) are at the brutal receiving end of the fickle trajectory of international capital flows. As Figure 1 indicates, net financial flows to such countries, which increased rapidly after the Global Financial Crisis that began and was created by advanced economies, peaked in 2014. Thereafter, they have been on a downward trend, which has accelerated dramatically from 2021, to the point that they turned negative in 2023, and are expected to fall further in 2024. In 2023, LMICs as a group (excluding China) sent an estimated $21.4 billion (which they could ill afford…

As India gears up for a potentially momentous general election over the coming weeks, the general perception within and outside the country is that the result is a foregone conclusion, with the prime minister, Narendra Modi, and his Bharatiya Janata Party likely to win a third term in office. This is surprising, because many of the indicators that voters are supposed to be concerned about, such as economic conditions and corruption, are not going so well interms of lived reality for most Indians and therefore, presumably, also for the incumbent government. The headline news creates the impression that the economy…

The newly-released India Employment Report 2024, produced by the ILO and the Institute for Human Development, contains a wealth of information and analysis on past and current employment patterns, and has an important focus on employment concerns of the youth in India. The report makes for grim reading, which should come as no surprise to anyone even minimally familiar with the sluggish job market and the Indian economy’s apparent inability to generate more good quality jobs. But there is another aspect of the findings in the report that deserves greater consideration: the perverse trends of structural change in recent years,…

Professor Jayati Ghosh taught economics at Jawaharlal Nehru University in New Delhi for nearly 35 years, and since January 2021 she has been a Professor of Economics at the University of Massachusetts Amherst. She has authored and/or edited 20 books and more than 200 scholarly articles. Recent publications include When Governments Fail: Covid-19 and the Economy, Informal Women Workers in the Global South, and Demonetisation Decoded. Jayati has advised governments and consulted for international organizations, including the International Labour Organization (ILO), United Nations Development Programme (UNDP), United Nations Conference on Trade and Development (UNCTAD), United Nations Department of Economic and…

Economics needs greater humility, a better sense of history, and more diversity The need for drastic change in the economics discipline has never been so urgent. Humanity faces existential crises, with planetary health and environmental challenges becoming major concerns. The global economy was already limping and fragile before the pandemic; the subsequent recovery has exposed deep and worsening inequalities not just in incomes and assets but in access to basic human needs. The resulting sociopolitical tensions and geopolitical conflicts are creating societies that may soon be dysfunctional to the point of being unlivable. All this requires transformative economic strategies. Yet…

For well over a decade, policy makers and citizens had little idea of the extent of income poverty or economic inequality in India, because of the absence of official survey data on consumption expenditure, which have formed the basis of such estimates in the past. The NSSO is supposed to conduct such surveys every five years, but the 2011-12 survey was the last for which any results were available until recently. The report of the survey conducted in 2017-18 was ready for release, but the Modi government decided to scrap it, probably because the results (apparently showing a decline in…

One persistent macroeconomic concern in the Indian economy over the past decade has been the continuing decline or stagnation in investment rates. The decline began after 2010, that is before the tenure of the Modi government, but it continued thereafter. As Figure 1 shows, even the slight recovery in investment (gross fixed capital formation) in 2021-22 left real investment only 6 per cent higher than the previous peak of 2019-20. But more significantly, while the investment rate (gross fixed capital formation as a share of GDP) in 2021-22 also recovered to some extent, it was still below the rate in…