Jayati Ghosh’s Blog

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…

There has been much excitement recently at the supposedly significant recent increase in work participation rates in India, which is being heralded as a sign of the success of the current government’s economic policies. How significant is this increase in employment? The data from the NSSO (from the Employment-Unemployment Survey of 2011-12 and the Periodic Labour Force Surveys of 2017-18 and 2022-23) provide some indication, as shown in Figure 1. Figure 1. Of course, these figures suggest that work participation rates in India are still very low by global standards, or even compared to countries at similar levels of development.…

Current account imbalances have been blamed in the past for creating external vulnerabilities that can lead to financial crises. In the run-up to the Global Financial Crisis (GFC) of 2008, for example, the large current account deficits of the US—matched by current surpluses of China and Germany—were widely seen as proximate reasons for the fragility that generated the crisis. The recovery thereafter was associated with smaller current account deficits, although the recent period has once again seen an increase. However, newer forms of imbalance are worth noting—most of all, the increasing values of the “discrepancy” in current account data, which…

Mientras Argentina se prepara para la segunda vuelta de la elección presidencial este domingo, la economía y la política económica han estado bajo los reflectores. Con el fin de comprender mejor algunos de estos temas de actualidad, el equipo de Comunicación y Participación de IDEAs sostuvo una charla con un eminente miembro de la red, el profesor Jayati Ghosh. A continuación presentamos la transcripción de esa conversación: Tema 1: Dolarización: La tasa de inflación anual en Argentina ha subido a casi 140% y la tasa de pobreza alcanzó 40,1% en el primer semestre. En ese escenario, para muchas personas resulta…

It has long been known that the very wealthy are able to shift their assets abroad and stash them away in tax havens and other jurisdictions. There are various reasons for doing this: to hide ill-gotten gains, to avoid or evade taxation, to insure against currency depreciation and otherwise hedge bets about likely economic performance in India. Much of this knowledge, however, was just based on anecdotal evidence or the occasional release of data provided by leaks like those of the Panama Papers. Now, however, we finally have more systematic attempts to measure and assess the extent of such illicit…

The many ways in which rich people and global companies can avoid tax have been quite widely known for some time. Periodically, information from leaks, such as the Panama Papers, creates public outrage and some (albeit often halfhearted) attempts by tax authorities to deal with at least some of the disclosures. But the full extent of such evasion and its global spread have been hard to assess, given its insidious nature, due to lack of data. Matters have though recently improved, with more information becoming available and more researchers willing to sift carefully through it. A landmark new Global Tax Evasion report from…