INDIAN STATISTICAL INSTITUTE
 
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ISI Delhi  >>  Planning Unit
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RESEARCH INTERESTS    
I am interested in Economics and Politics. Currently, I am working on theoretical papers involving sectoral growth, with emphasis on development of the services sector.
PUBLICATIONS

Growth of Business Services: A Supply-Side Hypothesis, with Satya P. Das

Forthcoming in Canadian Journal of Economics.

Abstract: It aims at explaining why/how the services sector may grow faster than manufacturing. It develops a two-sector, closed-economy model, having a manufacturing sector and a services sector. Accumulation of human capital serves as the basis of growth. The analysis focuses on business services, although household services are considered. It is argued that differences in returns to scale between the two sectors and employment frictions in manufacturing underlie how the growth rate of the services sector may be higher. The model also explains how within the services sector the business services sub-sector may grow faster than household services.

WORKING PAPERS
 

International Trade in Commodities and Services: Static and Dynamic Effects, with Satya P. Das

Updated: December 2014. Available on request.

Abstract: In the backdrop of service-sector growth in national outputs and international trade, this paper develops a theoretical model in which trade in commodities and trade in services are differentiated. It examines (one-period) static level effects, and dynamic (growth) effects of liberalization in commodities and services trade. Within the model's framework, the long-run sectoral growth rates in an economy are unaffected by any change in trade regime. But during periods of transition there is non-balanced growth across sectors, which is affected by trade regime changes. Transitional dynamics arises from that services are non-essential in the utility function, which implies a variable rate of intertemporal substitution in the household consumption of services. Static and dynamic effects are shown to depend on comparative advantage as well as features of trade among similar countries.

 

Tax Policy and Food Security, with Pawan Gopalakrishnan

Updated: November 2014. Available on request.

Abstract: We build a two sector (agriculture and manufacturing) heterogenous agent model to analyze the effects of a food subsidy program on output and employment. The government may finance this subsidy by levying a distortionary income tax or a tax on manufacturing consumption. We find that in the long run the program increases the output of the food sector but lowers the manufacturing output, independent of the method of its financing. While the price of food crop relative to the price of manufacturing good falls under an income tax regime, it increases under the consumption tax regime. We also determine the welfare effects on the farmer and the entrepreneur under both tax regimes. The program may have long-run welfare gains for both agents only for a certain range of subsidies. However, we find that financing this program using an indirect consumption tax regime is Pareto superior to a direct income tax regime.
 

Non-balanced Growth: The Role of Land, with Satya P. Das

Updated: December 2013. Available on request.

Abstract: The paper analyzes the role of land in explaining non-balanced growth in an economy. It develops a three-sector, closed-economy model, with agriculture, manufacturing and services sectors. Exogenous growth in sectoral TFP and labor serve as the basis of growth. Agriculture and manufacturing sectors use land as input, while services do not, and between agriculture and manufacturing, the former is more land-intensive. Hence, agriculture is most land-intensive, followed by manufacturing and then services. If TFP growth rate differences are small, the ranking of sectoral output growth rates is the reverse of that of sectoral land-intensity, i.e., the growth rate is the fastest in the services sector, followed by manufacturing and then agriculture. The same growth ranking is preserved in the presence of capital accumulation as long as services are the most capital intensive sector, followed by manufacturing and then agriculture.
 

A Two-Sector Model of Land Acquisition and Growth, with Satya P. Das

Updated: June 2013. Available on request.

Abstract: It develops a two-sector model of growth with agriculture and industry or manufacturing, in which land is an essential input to production in manufacturing. As capital accumulation occurs, land is acquired by the manufacturing sector from the agriculture sector. Unbalanced growth occurs in transitional periods as well as along the steady state. Along with the standard convergence effect, there is a land-acquisition effect on the growth rate of capital in the sense that the growth rate of capital is an increasing function of land acquired by the industrial sector. This may lead to non-monotonic growth rates over time of capital and manufacturing output. There may be an overshooting of growth rates also. We analyze the effects of a rehabilitation and resettlement (R&R) policy on growth and distribution. While such a policy benefits the farmers initially, after a certain time period, it reduces their welfare.
 

 

 
 
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Planning Unit, Indian Statistical Institute, 7 S.J.S. Sansanwal Marg New Delhi - 110 016