While it is sad to believe who can not grow forever, atleast in terms of economics, but it is hard reality. Ruchir Sharma offer his two-cents. His contention is that, at the time of Reagan productivity and population growth was both 1.75%, hence US could grow at 3.5%. With population growth declining and productivity at just .75% its hard to achieve purported 3-4% growth. This is the new normal and we all have to adjust to it.
Q4 growth has surprised most analyst, it has jumped to 7.9%. It is positive development given analyst were expecting 7.6%. But bigger unease is about the contribution of descrepencies, which is like 51%. So if we remove it, the growth fall to 3.9%.
Good news is consumer spending is increasing. And given 7th pay commision, OROP, and good moonsoon predicted, it should only improve. But can it be called roboust growth? Experts are not unanimously convinced. The investment has not picked up. and if takes another 2 years for Industry to be convinced about India, then they are staring at 2019 elections. And elections like anywhere, are fun in India.
The debate on accuracy and validity of new series is far from over. The data released by RBI from MCA has put the debate on the blow up factor of small industry. This is one thing in sample approach- which is most tricky. But never the less good insight.
Prof. Schiller(NYT) urges fellow economist to be up for the next recession. He takes a wholesome view on the learnings from the current crisis.
nice insight by Andy Mukherjee in BS on looking beyond the rates.
The center of gravity for economic thought in the United States has long been found along the two miles in Cambridge, Mass., that run betweenHarvard University and M.I.T. But there is new competition for that title, and it is quite a bit farther west.
Stanford University has lured an all-star lineup of economists to Palo Alto, Calif., in the last few years — and fended off Harvard’s and the Massachusetts Institute of Technology’s attempts to woo Stanford economists.
The newest Stanford professors include a Nobel laureate — Alvin E. Roth, formerly of Harvard — but the shift is more noticeable among top young economists. Of the 11 people who have won the John Bates Clark Medal for best economist under age 40 since 2000, four are now at Stanford, more than at any other university. Two of them joined in the last few months: the inequality researcher Raj Chetty, who came from Harvard, and Matthew Gentzkow, who left the University of Chicago.