Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2021

one half to

David Card
University of California, Berkeley, USA

“for his empirical contributions to labour economics”

and the other half jointly to

Joshua D. Angrist
Massachusetts Institute of Technology, Cambridge, USA

Guido W. Imbens
Stanford University, USA

“for their methodological contributions to the analysis of causal relationships”

Farm Laws

The Indian Agriculture Acts of 2020, often referred to as the Farm Acts were three acts* initiated by the Parliament of India in September 2020. 

*Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; Essential Commodities (Amendment) Act, 2020; and Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020. 

After having been approved by the Lok Sabha and the Rajya Sabha, the President of India gave his assent to the bills on 27 September 2020. 

Today, 19 November 2021, Prime Minister Modi announced the withdrawal of farm laws. The constitutional procedures around the same will begin during the upcoming Parliament session which will begin from November 29.

Political expediency or understanding of farmer's concerns?

Economic Survey 2018-2019

The Economic Survey has laid out a strategic road map to take India to the $5 trillion GDP league by 2024-25. 
The first economic survey of Chief Economic Adviser Krishnamurthy Subramanian can be summed up in terms of the following ten points:

(1) Focus on the virtuous cycle
At a time when the economy is gripped by a consumption slowdown, the Economic Survey talks about raising the investment rate and the saving rate to lift India to the next level of economic growth. 

(2) Case for a healthy India
The behavioural insights from the Swachh Bharat Mission can be used for laying the foundations of a healthy India. A healthy India means more labour productivity which translates into more savings and more investment.
(3) Reform the lower judiciary
The pendancy of cases at the lower judiciary level which leads to delay in contract enforcement is hampering India's further growth on the ease of doing business index. The Survey talks about fixing this gap within the lower judiciary through various means like increasing the working hours, improving the administration of courts and using technology to speed up the clearance in India's lower judiciary.
(4) VIP privileges if you are a top taxpayer
The Survey recommends incentivising top tax payers of the country. This includes VIP-like privileges such as expedited boarding privileges at airports, fast-lane privileges on roads and toll booths, special “diplomatic” type lanes at immigration counters, etc.

(5) A Detroit for EVs in India
The Survey visualises creating a Detroit for EVs in India. The Survey says, "EVs hold enormous potential for India not only because it is environment friendly but also because India can emerge as a hub of manufacturing of EVs generating employment and growth opportunities. It may not be unrealistic to visualise one of the Indian cities emerging as the Detroit of EVs in the future."
(6) Double down on reducing policy uncertainty

The message from the Chief Economic Advisor is that the policymakers should double down on their efforts to reduce the scope of any uncertainty in economic policy making as it affects investor sentiment.

(7) Deregulate labour laws
The Survey recommends easing of labour laws to spur job growth. The deregulating labour law restrictions to help create more jobs. “Deregulating labour law restrictions can create significantly more jobs, as seen by the recent changes in Rajasthan when compared to the rest of the states,” the Survey said.

(8) Infants, not dwarfs, need more care
The Survey says that the government should foster the growth of large firms which employ more than 100 people instead of focusing on smaller firms with less than 100 workers. The rationale is that the share of smaller firms in overall job creation and productivity is negligible compared to large firms which account for around 90 % of overall productivity and three quarters of job creation.

(9) Make Behavioural Economics an important pillar of policy making
The Survey takes insights from various government schemes which rely heavily on behavioural change. The voluntary giving up of gas subsidy in order to provide gas connection to poor households encapsulates the impact of behavioural economics. The Survey recommends setting up a "Behavioural Economics" unit in Niti Aayog and a "Behavioural Economics" audit for every government programme.

(10) Data revolution

The Survey recommends using public data to revolutionise development in the country. Since data is the new oil, the Survey says that data should be made a public good.  Data "of the people, by the people, for the people" must become the mantra for the government, which needs to view data as a "public good" and make necessary investments. 

Read more in Economic Times

Good Quote

“Wealth is not without its advantages and the case to the contrary, although it has often been made, has never proved widely persuasive. ”
― John Kenneth Galbraith, The Affluent Society

Current Account Surplus - Good or Mixed Bag?

Economists have led us to believe that trade deficits are unhealthy for any economy, and lead to a crisis over the long-run (e.g., Italy, Greece, Spain).

But trade surpluses also have their downside. 

For instance consider the case of some European countries like Germany, Sweden, Switzerland, Denmark and the Netherlands which have been piling up surpluses. 

In these countries there has been fewer imports, and less domestic spending. 

Germany's surplus is an old agreement between businesses and unions in favour of wage restraint to help export industries remain competitive. This has freed firms from the threat of being held to ransom by unions. The government on its part has sponsored an admirable system of vocational training. Maybe India could take a page out of this book, since we are already implementing Skill India!

However, for a large economy, at almost full employment to run a current account surplus in excess of 8% of GDP puts an unreasonable strain on the global trading system and is a threat to the global free trade. 

How Do You Become a Good Economist?

6. 

If you are at a college or university, attend the economic research seminars at your college whenever you get a chance. 

You may not understand the discussions at first, because they may seem too technical, but you will pick up more than you know, and eventually you’ll be giving the seminar yourself!

Good Quote

“Under capitalism the common man enjoys amenities which in ages gone by were unknown and therefore inaccessible even to the richest people. 

But, of course, these motorcars, television sets and refrigerators do not make a man happy. 

In the instant in which he acquires them, he may feel happier than he did before. 

But as soon as some of his wishes are satisfied, new wishes spring up. Such is human nature.”
― Ludwig Von Mises,