Economic Times ⁽²¹⁸⁾

The statistical techniques of measurement, for which Heckman and McFadden have been awarded the prize, may seem esoteric to a non-specialist. Yet, they are an indispensable part of the tool-kit of an empirical economist. Economic Times, October 18 2000. Heckman and McFadden: Revolutionaries in Empirical Microeconomics If you wanted to predict the Nobel Prize winners, your best bet would be to look among the winners of the John Bates Clark Medal. Starting with Paul Samuelson in 1947, this medal has been awarded every other year (except 1953) to the most outstanding American economist under forty. Of the first seven winners of the medal, six—Samuelson, Milton Friedman, James Tobin, Kenneth Arrow, Lawrence Klein and Robert Solow—became early recipients of the Nobel Prize. James Heckman of the University of Chicago and Daniel McFadden of the University of California, Berkeley, the winners of this year’s Nobel Prize, are both recipients of the Clark Medal: Heckman in 1983 and McFadden in 1975. Thus, there is little surprise in the fact that they have been awarded the coveted prize. The surprise lies, instead, in the…

(Full text and external link unavailable) Since politicians usually lack specialized skills, the burden of policy making often falls on the top layer of bureaucracy. But what if top bureaucrats themselves lack these skills? We then run the risk of blind leading the blind.

During his forthcoming visit to the United States, Prime Minister Atal Behari Vajpayee will have an unusual opportunity to promote the Indian viewpoint among the U.S. leaders and policy makers on issues of mutual interest to the two nations. Economic Times, August 30 2000 During his forthcoming visit to the United States, Prime Minister Atal Behari Vajpayee will have an unusual opportunity to promote the Indian viewpoint among the U.S. leaders and policy makers on issues of mutual interest to the two nations. For the first time since Rajeev Gandhi’s visit more than fifteen years ago, all eyes in America will be on a visiting Indian Prime Minister. Among those watching Vajpayee will be George W. Bush and Al Gore, the Republican and Democratic presidential hopefuls, respectively, as well as Bill Clinton, and the Congress. A key area in which the Prime Minister must take initiative to influence the American thinking is the new WTO Round. It may be recalled that the efforts to start such a round at the third WTO Ministerial Conference in Seattle in December 2000 had…

Jagdish Bhagwati had warned even as the Round was approaching closure that appeals to overly optimistic predictions could undermine future trade liberalization. Economic Times, August 25, 1999 In June 1993, Peter Sutherland succeeded Arthur Dunkel as the Director General of GATT and finally brought the Uruguay Round (UR) to a close. One of the arguments he used to persuade member countries to conclude the Round was that, according to the numerical predictions by researchers, the Dunkel Draft promised welfare gains worth hundreds of billions of dollars. Rubens Ricupero, Secretary General, UNCTAD, has recently questioned these predictions, characterizing them as “extravagant”. Many observers, familiar with the UR Agreement and the studies that made the extravagant predictions, share the Secretary General’s view. Indeed, economist Jagdish Bhagwati had warned even as the Round was approaching closure that appeals to overly optimistic predictions could undermine future trade liberalization. I have consistently maintained that trade liberalization, whether multilateral or unilateral, is beneficial to the liberalizing countries. Yet, in scholarly work, it is important to limit claims to what is justified by careful analysis and evidence.

The ban on retrenchment has produced few winners. Under the threat of strikes, it has forced firms to tolerate extreme inefficiency. The ban also discourages entrepreneurs from seeking entry into labour-intensive sectors and employing labour-intensive techniques. Economic Times, July 19 2000 Moving steadily ahead with its reforms agenda, the Vajpayee-Sinha combine is entering an area of policy that promises to be most fruitful but is also politically difficult: labour laws that effectively deny enterprises with 100 or more employees the right to exit and workers many of the basic benefits. In the heyday of the license raj, any entrepreneur lucky enough to obtain an investment license was guaranteed a handsome stream of profits. Because the entry of new firms was tightly controlled and imports were subject to strict licensing, poor buyers had nowhere to go. As late as 1980, the Hindustan Motors could produce the Ambassador car that had been discarded everywhere else in the 1950s and expect a queue of customers extending to two or more years into the future. This cosy arrangement, covering the entire organized sector, did…