Saturday, November 30, 2013

मज़हब की सियासी दुकानदारी

I spent 5 years of my childhood in Muzaffarnagar. Perhaps that is why the recent riots there disturbed me enough to get me to write.

Historian K.M. Ashraf's description of communalism as "मज़हब की सियासी दुकानदारी" was as poignant as it was accurate. Unfortunately, politics and administration (सियासत) remain equally responsible for communal violence today as they were in Ashraf's time.

Much of what I feel towards such such incidents has been beautifully expressed by none other than Sahir Ludhianvi himself. By writing anything else, I shall only be reducing the import of his words, and not adding to them.

धरती की सुलगती छाती के बेचैन शरारे (sparks) पूछते हैं,
ये किसका लहू है कौन मरा,
ए रहबरे (guide) मुल्को कौम बता,
ये किसका लहू है कौन मरा.

ये जलते हुए घर किसके हैं, ये कटते हुए तन किसके हैं,
तकसीम (partition) के अंधे तूफां मैं, लुटते हुए गुलशन किसके हैं,
बद वक्त खिजाएं (decay) किसकी हैं, बर्बाद नशेमन (residence) किसके हैं,
कुछ हम भी सुनें, हमको भी सुना,
ए रहबरे मुल्को कौम बता,
ये किसका लहू है कौन मरा.

किस काम के हैं ये दिन धरम, जो शर्म का दामन चाक (torn) करें,
किस तरह के हैं यह देश भगत, जो बस्ती घरों को खाक करें,
ये रूहें कैसी रूहें हैं, जो धरती को नापाक करें,
आँखे तो उठा, नज़रें तो मिला,
ए रहबरे मुल्को कौम बता,
ये किसका लहू है कौन मरा.

जिस राम के नाम पे खून बहे, उस राम की इज्ज़त क्या होगी,
जिस दीन के हाथों लाज लुटे, उस दीन की कीमत क्या होगी,
इंसान की इस ज़िल्लत के परे, शैतान की ज़िल्लत क्या होगी,
ये वेद हटा, कुरान उठा,
ए रहबरे मुल्को कौम बता,

ये किसका लहू है कौन मरा.

Sunday, August 25, 2013

A reading list for the IES (Indian Economic Service) Exam

This post if for all those appearing or planning to appear for the Indian Economic Service exam. I gave the exam in 2012 (my second attempt) and was placed 7th.

There are a total of 6 papers in this examination. Here, I have given readings only for General Economics I, II and III.

The books referred to in this reading list are the following:

  1. Pindyck and Rubinfeld - Microeconomics, 3rd edition
  2. Dornbusch and Fischer - Macroeconomics, 6th edition
  3. J.R. Gupta - Public Economics in India, Theory and Practice
  4. Chiang and Wainwright, 4th edition - Fundamental Methods of Mathematical Economics 
  5. S.C. Gupta - Fundamentals of Statistics (I think there is only 1 edition)
  6. Debraj Ray - Development Economics (only one edition)
Please keep the following in mind while using these readings:

  1. Most of the readings are from the web. A lot of them are from wikipedia and other non-scholarly sources. They are not substitutes for readings from economics textbooks. These readings should be used to brush up old concepts, if you find looking up old textbooks a bit tedious.
  2. Scores in the General English and General Studies papers are important too. Ignore these papers at your own risk.
  3. I have not included any readings for the Indian Economics paper. Two good books for this paper are The Concise Oxford Companion to Economics in India by Basu and Maertens and Indian Economy Since Independence by Uma Kapila. There's a newer edition of the book by Kapila in the market but I have not read it.
A strong word of caution: Whenever you are unsure about something, please go back to your grad/post-grad textbooks. The internet is a very convenient source, but not the most reliable.

As an afterthought, let me also mention the questions that were put to me by the interview panel:

  1. What is REER? On how many currencies is it based?
  2. Applications of Linear Programming? Leontiev input-output model?
  3. How would I estimate a demand curve for milk using time series data? What would be its shape and why?
  4. Limitations of time series data? Difference between technical and fundamental analysis?
  5. Cost benefit analysis and its applications?



Here are the readings, hope these help!

General References

The following will be helpful in finding definitions and short introductions to concepts:

Paper I

1. Theory of Consumer Demand

Relevant chapters in Rubinfeld and Pindyck

2. Theory of Production

Factors of Production and Production Functions, Forms of Production Functions: Cobb Douglas, CES and Fixed Coefficient Type, Translog Production Functions

Measures of productive efficiency of firms, technical and allocative efficiency

Partial Equilibrium vs General Equilibrium Approach
Pindyck and Rubinfeld, Chapter 16
http://www.stanford.edu/~jdlevin/Econ%20202/General%20Equilibrium.pdf (Very detailed document, need not study whole)

Equilibrium of the firm and industry

Duality and Cost Function
???


3. Theory of Value

Pricing under different market structures, peak load pricing
Pindyck & Rubinfeld, Chapter 11, Pricing with Market Power
Pindyck & Rubinfeld, Chapter 12, Monopolistic Competition and Oligopoly

Pricing with incomplete information and moral hazard problems
Pindyck and Rubinfeld, Chapter 17, Markets with asymmetric information

Public Sector Pricing
J.R. Gupta, Appendix 1, Pricing of Public Services and Return on Investment

Cross Subsidy Free Pricing: Average Cost and Marginal Cost Pricing


Marshallian and Walrasian Stability Analysis


4. Theory of Distribution

Neo Classical Distribution Theories; Marginal Productivity Theory of Distribution of Factor Prices, Factor Shares and Adding Up Problems, Euler’s Theorem

Pricing of factors under imperfect competition, monopoly and bilateral monopoly

Macro Distribution Theories of Ricardo, Marx, Kaldor, Kalecki
 ??? (Kaldor)


5. Welfare Economics


6. Mathematics

Any good book like Chiang

7. Statistics

Any good book like SC Gupta


Paper II

1. Economic Thought

Mercantilism

Physiocrats

Classical
http://www.econlib.org/library/Enc/bios/Smith.html
http://www.econlib.org/library/Enc/bios/Ricardo.html

Marxism

Neo Classical

Keynes

Monetarism


2. Concept of National Income and Social Accounting

Measurement of national income, interrelationships between three measures of national income in the presence of the government sector and international transactions.
NCERT Class XII Macroeconomics textbook, Chapter 2 - National Income Accounting

Environmental Considerations, Green National Income
See readings for Paper III, Section 2


3. Theory of Employment, Output, Inflation, Money and Finance

The Classical and Keynesian Theories
Relevant chapters in Dornbusch

Inflationary Gap

Demand Pull and Cost Push Inflation

Phillips Curve and Policy Implications

Classical Thoery of Money

Quantity Thoery, Friendman’s Restatement     


4. Financial and Capital Markets


5. Economic Growth and Development

Neo Classical Approach: Robinson, Solow, Harrod Domar Kaldor

Theories of Economic Development
Debraj Ray, Development Economics, Chapter 10 (Section on Lewis Model)

Utilitarian and Welfarist approach to social development and Sen’s Critique, Capability Approach

Human Development Index, Physical Quality of Life Index and Human Poverty Index


6. International Economics

Gains from International Trade:

Terms of Trade:

Policy:

International Trade and Economic Development:

Theories of International Trade: Ricardo, Haberler, Hekscher-Ohlin and Stopler-Samuelson

Theory of Tariffs:

Regional Trade Agreements:


7. Balance of Payments

Foreign Trade Multiplier

Multiple Exchange Rates



8. Global Institutions
Jagish Bhagwati, In Defense of Globalization, Chapter on MNCs




Paper III

1. Public Finance

Theory of taxation, optimal taxes and tax reforms, incidence of taxations

Theories of Public Expenditure, objectives and effects of public expenditure, policy and social cost beneit analysis, criteria of public investment decisions and social rate of discount:
Chapter 4, J.R. Gupta

Shadow prices of investment, labor and foreign exchange:

Budgetary deficits

Theory of Public Debt Management
J.R. Gupta, Chapter 6



2. Environmental Economics

Green GDP:

UN Methodology of Integrated Environmental and Economic Accouting:

Kyoto Protocol

Tradable Permits and Carbon Taxes

Environmental Values: User and Non-User Value, Option Value, Valuation Methods, Stated and Revealed Preference Methods

Theories of exhaustible and renewable resources

Collective Action


4. State, Market and Planning
Uma Kapila, Indian Economy Since Independence, Chapter 2
planningcommission.nic.in/aboutus/speech/spemsa/dchplan.doc (Indicative planning)





Saturday, December 29, 2012

It's not them, it's us


What prompted me to write this was a recent editorial in Indian Express by Amulya Gopalakrishnan. It is one of the many opinion pieces that have appeared since the brutal gang rape of a 23 year old Delhi medical student. She starts off sensibly by building a case that the “certainty of punishment, rather than the severity of punishment, is the real deterrent”. I completely agree, and couldn't have put it better myself. I also agree with her suggestions on police reform and judicial pendency  But the rest of the editorial outraged me enough to write a 400 word admonishment than just a 140 character censure.

I am tempted to do a piece by piece rejection of statements like calling the protests a “mechanical tirade against the government” and calling some of the protesters “childishly self centered”  for demanding that “just because they had shown up at India Gate, the PM must too”. But this would be missing the wood for the trees. Instead, I choose to take umbrage at the broader message that the author is trying to convey. And that message is the following: it is us, the society, that treats women badly and since “institutional responses also flow out of social responses, ultimately” we are to blame and not the government.

I agree that much of our society remains regressive, especially when it comes to gender related issues. But that cannot be used to condone government’s errors of commission and omission. In a perfect democracy, if there is any such thing, the people get the government they deserve. But our democracy, just like any other democracy, is far from perfect, and despite the many failures of our society, we deserve better. I say this because of my firm belief that politics can and must have a vision of its own. This vision, rather than merely reflecting social attitudes, should try to improve them. Such a constructive and forward looking political vision has been completely absent from parliament. How many parliamentary debates have we had on the state of primary education in our country? Compare this to the number of discussions in parliament on reservations and caste issues. Is it then any surprise that we remain a regressive society? And is government, and politics not to blame?

I’m in no way suggesting that all we should do is to blame politicians and be done with it. We should all pause, and reflect inwards about what happened to that girl on that night. Our attitudes need to change, but so does the politics of our country.


Tuesday, July 31, 2012

On West Asia



Discussions on international relations have always been dominated by affairs of West Asia. Recent events in the region (unrest in Syria and the Iranian nuclear impasse) have only served to highlight its predominance in contemporary geopolitics. Much of this centrality can be attributed to historical and geographical factors.

The West Asian region has a rich civilizational history. The ancient Mesopotamian and Persian civilizations were cultural, economic and technological giants. Modern science (particularly mathematics) and language have much to owe to these ancient behemoths. The medieval period saw increasing contact between West Asia and other parts of the world, although not always on cordial terms. The crusades defined the boundaries of modern religion. The Mughals (with origins in Central Asia) ruled India for the better part of 300 years. They brought along with them elements of Islamic culture, architecture and language which proudly coexist till date with other indigenous elements.

In modern times, West Asia has witnessed a great deal of turmoil. The region overcame its colonial past only to fall prey to autocratic (and often theocratic) rulers. Democracy was an exception, rather than a rule. Inter-state violence was common, driven by territorial and ethnic conflicts. The recent 'Arab Spring' has seen the re-emergence of green shoots of democracy in the region, but the movement is already threatened by a counter-revolution marked by the resurgence of the old guard.

West Asia (comprising, in its broadest sense, of Iran, Iraq, Turkey, Syria, Israel, Jordan, Lebanon along with countries in the Persian Gulf: Saudi Arabia, Qatar, Kuwait, Yemen, Oman, Bahrain and UAE and North Africa: Egypt, Libya and Tunisia) can best be described as the geo-center of the world. Apart from being located in the center of Asia, Africa and Europe, the region is also home to some of the most important shipping routes in the world. It is impossible to imagine world trade surviving without the use of Straits of Mandeb, Suez and Hormuz. The abundance of oil and gas reserves in the region makes the geo-centrality acquire an economic dimension as well. 

It should come as no surprise then, that the region has been witness to many conflicts of power. Most of these have their roots in religion. Claims of ownership over the land claimed to be the birthplace of three major world religions have often turned violent. The Israel-Palestine conflict (within the larger Israel-Arab conflict) is central to the region's struggles for power. While the resolution of this decades old conflict is nowhere in sight, several other fault lines have developed in the region

One of them has to do with oil, and the world's incessant hunger for it. Years since the Soviet disintegration in 1991 have seen the US emerge as the unchallenged economic and military superpower. Its rising energy needs have made it look towards West Asia as a perennial source of energy. It took the first opportunity it got (the Iraq-Kuwait conflict in 1991) to establish a permanent foothold in the region. Subsequently, it not only secured its energy requirements for the coming decades, but also gained a large influence on the strategic and economic discourse of the region. Given that oil trade is denominated in dollars and American institutions dominate world finance, the US enjoys the power to impose sanctions at will on countries in this region, or even countries trading with this region. The recent sanctions on Iranian oil exports serve as a case in point.

This is not the only example of the kind of power accorded to the one who dominates this strategically important area. Another example relates to the notion of 'hegemony' and 'balance of power'. The oil export earnings of West Asia have made some countries exceptionally rich. But most of the riches have been expropriated by the autocratic rulers of these states. Ironically, the US, which claims to be the champion of freedom and democracy, has been relentless in its diplomatic backing of these states. It has thereby secured their cooperation in effecting regime change in countries which are ideologically opposed to American hegemony in the region. In the pretext of maintaining balance of power in the region, the US has prevented Iran from pursuing nuclear enrichment for legitimate civilian purposes. It has spared no effort in toppling an Iran friendly regime in Syria. It has been ably supported by the GCC (Gulf Cooperation Council) states and Turkey, who have received generous military and economic aid in return.

In this process, the US has also aggravated ethnic conflicts among Muslims. Iran and Syria are the last remaining bastions of the Shia elite (who also have the support of the Lebanon based Hezbollah). The Sunni majority Arab world (particularly the GCC countries) would be very pleased with a US assisted regime change in these two countries (on the lines of Iraq). 

It is common knowledge that a large part of Islamic extremist activities are funded by the petrodollars generated in the oil kingdoms of the Persian Gulf. Any furtherance of ethnic divides in the region can fuel the spread of extremist elements and their activities. Islamic extremism is spreading its tentacles from the traditional strongholds in Afghanistan and Pakistan to hitherto unaffected areas of the Arabian Peninsula (AQAP, Al Qaeda in the Arabian Peninsula), Western Africa (Boko Haram in Nigeria), North Africa (AQIM, Al Qaeda in the Maghreb) and East Africa (Al-Shabab in Somalia)

The ability and willingness of the US and GCC to manipulate the ethnic divides among Muslims and use the extremist factions to achieve their own objectives should not be underestimated. It is already being observed that some elements of Al Qaeda are actively cooperating with anti-regime forces in Syria. That the US was (and perhaps even currently is) in negotiations with the Taliban in Qatar, on the future of Afghanistan should reinforce our doubts. It is through these (often devious) ways that the US extrapolates its influence over West Asia over the entire world.

But the times are changing. The economic might of the US and Europe is in decline. What started as the 2008 financial crisis soon spread to Europe, and is being seen by many as the beginning of the end of a uni-polar world and the start of the Asian century. The US recognizes this too, and does not plan to assume for itself the role of the global vanguard in the future. It has already announced an exit from Afghanistan by the end of 2014 and hopes to play a more ancillary role in the region. The exigencies of fiscal consolidation have also forced it to cut military spending, and accept a reduced role in shaping global geo-politics. This has been reflected in West Asia too. US (along with Israel and GCC) have not yet been successful in effecting a regime change in Syria (although they might eventually succeed in doing so). Russia and China have stalled their efforts at the UN to get sanctions for direct military intervention. India and other major economies have resisted implementing US mandated sanctions on oil imports from Iran. 

All these development point to one fact: American influence in West Asia is waning. The discovery of newer techniques of extracting shale gas (fracking and horizontal drilling) has also reduced American dependence on oil and gas from West Asia. US has abundant reserves of shale gas, and its increasing extraction in years to come, will reduce its interest in West Asia.

The replacement of the current hegemonic power structure by a power void in West Asia is inevitable. Whether a new emerging power (like China) will rise to fill this void or the political-strategic space will be shared by regional powers remains to be seen. But whatever characteristics the new power structure assumes, it will have a profound impact on world politics and economics.