Economy Plunging Headlong into Recession Prabhat Patnaik

Volume II of the Economic Survey which was brought out by the Ministry of Finance a few days ago paints an extremely grim picture of the Indian economy. The growth rate of real Gross Value Added (GVA which is the appropriate thing to look at, since the GDP measure includes net indirect taxes and hence does not truly reflect output trends), was 6.6 percent for 2016-17 as a whole, compared to 7.9 percent for 2015-16. More importantly, the quarterly growth rate (i.e. the growth rate of GVA in a particular quarter over the corresponding quarter of the preceding year) kept…

What is really happening in Indian Manufacturing? C.P. Chandrasekhar & Jayati Ghosh

Data on organised manufacturing production do not really capture the impact of demonetisation and its effects on demand, but looking at some sub-sectors of consumer non-durable goods provides more insight. Indian_Manufacturing (Download the full text in PDF format) (This article was originally published in the Business Line on August 14, 2017.)

Leadership Failure Perpetuates Stagnation Jomo Kwame Sundaram

What kind of leadership does the world need now? US President Franklin Delano Roosevelt's leadership was undoubtedly extraordinary. His New Deal flew in the face of the contemporary economic orthodoxy, begun even before Keynes' General Theory was published in 1936. Roosevelt's legacy also includes creating the United Nations in 1945, after acknowledging the failure of the League of Nations to prevent the Second World War. He also insisted on ‘inclusive multilateralism' – which Churchill opposed, preferring a bilateral US-UK deal instead – by convening the 1944 United Nations Conference on Monetary and Financial Affairs at Bretton Woods with many developing…

After neoliberalism, what next? Jayati Ghosh

We may be living through one of those moments in history that future historians will look back on as a watershed, a period of flux that marked a transition to quite different economic and social arrangements. Unfortunately, in human history a ‘moment’ can be a very long time, so long that it could be decades before the final shape of the new arrangements are even evident; and in the interim, there could be many ‘dead cat bounces’ of the current system. What is clear is that the established order – broadly defined as neoliberal globalised finance capitalism – is no…

NPAs: All talk and no action C. P. Chandrasekhar

The media are full of it. Viral Acharya, a recently inducted Deputy Governor of the Reserve Bank of India (RBI), has declared publicly that resolving the problem of bank stress resulting from large non-performing assets (NPAs) on their balance sheets is the RBI’s priority, taking precedence over measures such as interest rate reduction to spur growth. The issue here is not just one of preventing bank insolvency, but of keeping the credit pipe open. Banks burdened with NPAs are likely to be less willing to expand their loan books, and if interest rates are too low, banks may be unwilling…

UN Analytical Leadership in Addressing Global Economic Challenges Jomo Kwame Sundaram and Jose Antonio Ocampo

The United Nations recently released the 70th anniversary issue of its flagship publication, the World Economic and Social Survey (WESS). First published in January 1948 as the World Economic Report, it is the oldest continuous publication analyzing international economic and social challenges. The 2017 issue reviews 70 years of WESS policy recommendations, many of which remain relevant today to address global challenges and to achieve the 2030 Agenda or Sustainable Development Goals. Created in 1945 to ensure world peace, the United Nations charter recognized that economic and social progress for all is fundamental for ensuring sustainable peace. The UN has…

Growth in the Time of a Credit Squeeze C.P. Chandrasekhar and Jayati Ghosh

GDP growth figures for the last few years have camouflaged a deceleration in credit growth that has affected all but the retail loans segment quite adversely. Credit_Squeeze (Download the full text in PDF format) (This article was originally published in the Business Line on July 31, 2017.)

Alcoholism Cannot Explain Russian Mortality Spike Jomo Kwame Sundaram and Vladimir Popov

The steep upsurge in mortality and sudden fall in life expectancy in Russia in the early 1990s were the highest ever registered anywhere in recorded human history in the absence of catastrophes, such as wars, plague or famine. The shock economic reforms in the former Soviet economies after 1991 precipitated this unprecedented increase in mortality, shortening life expectancy, especially among middle-aged males. Shock therapy During 1987-1994, the Russian mortality rate increased by more than half, from 1.0% to 1.6%, as life expectancy fell from 70 to 64 years! Economic output fell by almost half during 1989-1998 as wealth and income…

Progressive Mobilization in Europe Jayati Ghosh

Meetings of global leaders – such as recently occurred in the G20 meeting at Hamburg – increasingly have a ring of farce about them. The inability to come to agreement on pretty much anything of significance is leavened only by sideshows and media obsession with which global leader met with whom for how long, who sat in for which President at the “high table”, and similar trivia. Meanwhile, there is abject failure on the part of these leaders to recognize the pressing need for urgent and co-ordinated global action to solve so many current problems, ranging from the terrible state…

Early Death in Russia Vladimir Popov and Jomo Kwame Sundaram

The transition to market economy and democracy in the Russian Federation in the early 1990s dramatically increased mortality and shortened life expectancy. The steep upsurge in mortality and the decline in life expectancy in Russia are the largest ever recorded anywhere in peacetime in the absence of catastrophes such as war, plague or famine. During 1987-1994, the Russian mortality rate increased by 60%, from 1.0% to 1.6%, while life expectancy went down from 70 to 64 years. Although life expectancy declined from 1987, when Mikhail Gorbachev was still in charge, its fall was sharpest during 1991-1994, i.e., during Boris Yeltsin’s…