Advanced degree in economics (preferably a Ph.D.) with specialization in one or more of the following fields (agricultural, energy or environmental economics, CGE modeling, micro-simulation techniques, macro modeling)
Experience with CGE modeling, GAMS and/or Stata
The grocery market in the United States accounts for more than 25 percent of all retail sales, totaling hundreds of billions of dollars. The last decade has seen important transformations in the market structure of this industry with non-traditional retailers such as Walmart and Costco accounting for more than 30 percent of total grocery sales. For any given product, the spread of consumer prices from different retailers is orders of magnitude larger than price fluctuations from changing world food market conditions. The average consumer faces prices that differ by more than 20 percent across stores in the same area.
In my view, the case rests on three pillars.
First, Ukrainian leaders have to explain to the citizens why the pre-crisis economic model was not sustainable and what the risks are of delaying adjustment. They need to explain that reforms are needed to avoid loading future generations with debts they cannot repay. Ukraine's public debt ratio was very low before the crisis at 12% of GDP. It will reach close to 40% by the end of 2010. Unless a plan is presented that stops the increase, financing the current deficit will be impossible. The result of inaction would be further devaluation, higher inflation, and further strains on the banking sector. The costs of inorderly adjustment on the common man through reduced real wages and rising unemployment would be much higher than the increases in the monthly utility bill.
Second, to the population at large, reforms need to be presented as a balance of sacrifice. You cannot ask citizens to pay more for utilities and to accept a reduction in pension benefits, if parliamentarians, judges, military officers and high ranking officials still benefit from categorical privileges, early retirement schemes, free housing and many other benefits. Expenditure cuts, which are necessary, are also a hard sell when tax loopholes persist, be it through VAT exemptions that have inflated producer profits but failed to keep end-user prices down, double taxation treaties (such as the one with Cyprus) that facilitate profit tax avoidance, or the Simplified Tax System for individual entrepreneurs that creates inequities across tax payers and erodes the tax base. More generally, a credible plan to improve governance and reduce corruption is key if reforms are to overcome their bad image.
Third, the vulnerable need to receive reassurance that they will be protected. Ukraine has the infrastructure and the resources to deliver targeted social assistance to the poor. However, existing well targeted programs remain underfunded, while poorly targeted benefits gobble up the bulk of social transfer spending. Reallocating funds from poorly to well-targeted programs will allow the poor to be protected at no fiscal cost.
While a large literature has examined the importance of microfinance for fostering economic development, microinsurance has received much less attention. A recent paper by Hongbin Cai, Yuyu Chen, Hanming Fang, and Li-An Zhou is among the first to examine the causal effect of microinsurance on production behavior, in the context of hog farming in rural China. Pork meat is an important part the Chinese daily diet, but pork production is very vulnerable to adverse shocks, such as infectious disease and natural disasters. In China, hogs are predominantly raised by rural households as a sideline business. In 2007, the Chinese government implemented a subsidized sow insurance program in some regions with the goal of increasing pork supply to lower prices that had risen after a disease had caused high mortality among hogs. In order to let farmers know about this program and to encourage them to enroll, the government hired an animal husbandry worker in each village. The authors designed an experiment where they provided additional monetary incentives to randomly chosen animal husbandry workers for enrolling farmers in the sow insurance program. Villages where animal husbandry workers received higher incentives have a higher number of insured sows after the experiment. The authors then estimate the effect of this randomly generated variation in the number of insured sows on village sow production. They find that larger insurance coverage significantly increases the number of sows raised in a village. Although the insurance program was heavily subsidized, take-up rates were only around 50 percent. The authors provide evidence that low take-up rates can be attributed to a lack of trust in government sponsored insurance programs. Take-up rates increased after claims were paid out in some regions hit by a natural disaster, allowing farmers to learn about the credibility of the insurance product.
For many years, studies like these have influenced both politics and policy, fueling national marriage-promotion efforts, like the Healthy Marriage Initiative of the U.S. Department of Health and Human Services. From 2006 to 2010, the program received $150 million annually to spend on projects like “divorce reduction” efforts and often cited the health benefits of marrying and staying married.
Efficiency savings: in recent years there has been a concerted drive to reduce the costs in commodities like electricity, to professionalise property management and to make more use of shared services. Here there is a question about control – how far should control be centralised or devolved
to best make efficiency savings. Striking the right balance is difficult, but
possible, as the Institute’s recent work on IT makes clear. The second question is about how such savings translate into cash coming out of the system – to be credible it must be clear which budgets have been reduced in anticipation of these savings, and therefore which ones have to make up any shortfall should the projected efficiencies not be realised.
Politics are also the reason why the real tough work required for a successful fiscal consolidation usually takes within the first two budgets after a change of government. If this doesn’t happen, the sense of urgency amongst voters dissipates. Political support for consolidation falls away rapidly, with the electorate falling prey to what the London-based Institute for Government calls – in its interesting recent report Undertaking a Fiscal Consolidation – “consolidation fatigue”.
In a review of every major fiscal correction in the OECD since 1975, we find that decisive budgetary adjustments that have focused on reducing government expenditure have (i) been successful in correcting fiscal imbalances; (ii) typically boosted growth; and (iii) resulted in significant bond and equity market outperformance. Tax-driven fiscal adjustments, by contrast, typically fail to correct fiscal imbalances and are damaging for growth....
In a landmark paper in the mid-1990s, the economists Alberto Alesina and Roberto Perotti found that economic growth fared much better during large fiscal corrections that were (i) decisive rather than gradual and (ii) relied on reductions in current government spending, rather than cuts in public-sector investment or higher taxes.
“I have to collect firewood, rather than do some job that I have no idea what is the point, which I hate, and from which I am completely alienated,” he said. “Everything in my life feels full of meaning.”
I'm doing this because I like accountability and transparency, and I believe in public service. And it is the complete opposite of everything else I do. Maybe I'll learn something. The practical consequence is that I will probably go to Washington several days each month, in addition to whatever homework and phone meetings are necessary.
Though often cast as a free-floating information guru, Mr. Tufte has a highly specific mission: on March 5, he was appointed by President Obama to a panel to advise the Recovery Accountability and Transparency Board, which monitors the way the $787 billion in the stimulus package is being spent...
“Political practice today too often skips right by evidence,” he said by e-mail. “When I listen to True Believers (left or right) talk about the problems that governments are seeking to solve, I keep muttering to myself, ‘How boring, it’s more complicated than that.’ And those who best know that it’s more complicated than that are public servants.”
The board has two missions: to root out waste, fraud and abuse in spending and to inform the American public how the stimulus money is being spent...
In an e-mail message, Mr. Tufte recalled the meeting and said that generally his advice had been to add more information to the site so that a visitor could see things in context. “It shouldn’t look like a government Web site, and it shouldn’t look like a corporate Web site,” he said. “This is a reporting thing — about factual, credible reporting.”...
Jerry Brito, a senior research fellow at George Mason University, has been monitoring the stimulus at his site, stimuluswatch.org.
“What we want is the raw data. We don’t need a beautiful site,” Mr. Brito said.
In fact, he says that recovery.gov is too flashy and too crowded, and uses maps too much instead of simple tables. “Tufte can do a lot of good here,” he said. “There is a lot of low-hanging fruit.”
If the relationship between money and well-being is complicated, the correspondence between personal relationships and happiness is not. The daily activities most associated with happiness are sex, socializing after work and having dinner with others. The daily activity most injurious to happiness is commuting. According to one study, joining a group that meets even just once a month produces the same happiness gain as doubling your income. According to another, being married produces a psychic gain equivalent to more than $100,000 a year.
If you want to find a good place to live, just ask people if they trust their neighbors. Levels of social trust vary enormously, but countries with high social trust have happier people, better health, more efficient government, more economic growth, and less fear of crime (regardless of whether actual crime rates are increasing or decreasing).
Years of decisions dictated by political expediency have led to a chronic budget imbalance that threatens our short-term solvency and long-term economic health.
Fortunately, Lt. Gov. Richard Ravitch has put forward a plan to provide sorely needed oversight and discipline. He proposes to create a financial review board that would certify the budget only if it’s balanced. The board would employ a smart, multiyear strategy that would weigh significant cuts in spending against limited borrowing. And it would require Albany to adopt generally accepted accounting principles, the standard bookkeeping rules used in business.
Finally, our short-term cash crunch would be eased if the state refinanced the interest rates on its tobacco-settlement bonds. Given current low long-term interest rates, this is preferable to Lt. Gov. Richard Ravitch’s plan, under which the state would borrow $2 billion a year over three years for operations, leading us down a perilous road of annual borrowing.
A PFM strategy and its corresponding action plan for the period 2009–11, was adopted by the Council of Ministers in May 2009. It has been designed to address PFM weaknesses identified in particular through FAD diagnostic work since 2005, the Public Expenditure Management and Financial Accountability Review (PEMFAR) finalized by the World Bank in February 2008, and a Public Expenditure and Financial Accountability (PEFA) assessment performed by the European Commission (EC) in December 2008....
While promising initiatives have been recently implemented, including the installation of a Steering Committee chaired by the Minister of Finance, and of nine technical groups to implement the PFM reforms, the leadership of the reforms process within the MoF and to coordinate TA provided by donors will need to remain a point of attention....
Because of the slow pace of progress, signs of discouragement (from the experts), de-motivation (from the staff), and impatience (from the donors) are appearing, especially if it is considered that the “easiest” part of the reform has been done—strategy, action plan, laws, and decree in particular—and that the next step being a full and consistent implementation of all the provisions and actions developed in these various documents.
The Ministry of Finance currently comprises some 250 employees (not including customs). Its workforce is thin and unmotivated at higher levels (except for some of the top officials), and drifting and underskilled at lower levels. The general erosion of staff and skills in the Burundi government, not only because of the conflict but because of the much higher compensation offered in Rwanda more recently as well, is well known and has affected the Ministry of Finance as much as the rest of the government. Issues of capacity building in the Ministry of Finance are thus no different than systemic capacity building and civil service issues in general.
Fiscal policy is also geared to addressing debt sustainability concerns. Given Burundi’s debt burden, external financing of the budget should be strictly limited to grants and highly concessional loans.
The ratio of the government wage bill to GDP will decline less than anticipated in the medium term owing to higher payroll in the priority sectors, which are key for achieving progress toward the Millennium Development Goals. The ratio should remain below 11 percent of GDP toward the end of the program in 2011.
To contain the wage bill, the government will continue to draw on the findings of the Public Expenditure Management and Financial Accountability Review (PEMFAR) prepared jointly by the World Bank and the government of Burundi. In particular, with the census of civil servants having been completed and payroll management transferred to the Ministry of Finance, the government will proceed with the audit of the payroll to ensure that the calculated wages are indeed on a sound legal basis and that there are no abuses. This audit should precede the exercise to harmonize wages. To increase spending in the priority sectors, the government will implement a rationalization plan for nonpriority spending, in accordance with the PFM strategy.
Burundi will seek only concessional external financing or grants. The government will not contract nonconcessional foreign debt and will ensure that all loans contracted have a grant element of at least 50 percent. To make certain that the concessionality threshold is respected, the government will ensure compliance with the provision that the Ministry of Finance has the exclusive right to negotiate and sign external loans.
National Accounts
Serious deficiencies in real sector data handicap analysis and economic management. National accounts are compiled infrequently. Source data on agriculture, the most important activity, is inadequate. The Statistical Office (ISTEEBU) responsible for producing economic statistics and preparing national accounts has weak capacity. Since 1998 Burundi has reported annual national accounts estimates to the Fund with about a three-month lag, which are derived from a macroeconomic projection model maintained by the Ministry of Planning and Reconstruction. Recently, ISTEEBU has developed, with AFRISTAT’s help, a set of provisional national accounts for 2005, the new base year. This is a major effort because the last national accounts data were from 1998.
GDP per capita is about $139, and only 18 percent of the population has food security. The IMF and World Bank have cancelled more than 90 percent of Burundi's debt, worth about $1.4 billion.
The Hidden Wealth of Nations by David Halpern
Table of Contents
Preface and Introduction.
Chapter One: Prosperity and wellbeing.
Chapter Two: Not getting along.
Chapter Three: The politics of virtue.
Chapter Four: Fairness and Inclusion.
Chapter Five: Power and Governance.
Chapter Six: Conclusion.
Is Jamie Oliver right to emphasise healthy school meals? Run a trial. Should young offenders be sent to boot camp, or to meet victims of crime? Run a trial. What can we do to persuade households to use less electricity? Run a trial...
When the UK government recently introduced the “synthetic phonics” method of teaching young children to read, they were told by Carole Torgerson, an evaluation expert at the University of York, that they could easily bolster the slim evidence base by randomising which schools joined the programme first. They didn’t. (More encouragingly, Ms Torgerson has been commissioned to evaluate maths teaching.)
Some people feel queasy at talk of “experimentation” in the classroom, prison or benefit office – but politicians experiment on us all the time with their latest policy wheezes. We learn little or nothing because the experiments are badly designed.
What is missing is the political demand for tests of what really works. Too many policies on education, welfare and criminal justice are just so much homeopathy: cute-sounding stories about what works leaning more on faith than on evidence. Politicians and civil servants, faced with some fancy new idea, should get into the habit of asking for a proper randomised trial. And we, as citizens, should be equally demanding....
Trial registers also feed into systematic review bodies such as the Cochrane Collaboration, which is an international offshoot of a National Health Service initiative. In less than two decades, the Cochrane Collaboration has published 4,000 systematic reviews of medical treatments, digging up data from unpublished trials, and providing the information to save many lives. A parallel body for social policy has far fewer trials to evaluate
Only 20 of 128 economies have equal legal rights for men and women in several important areas for entrepreneurs and workers, according to a new World Bank Group report, Women, Business and the Law 2010.
Increasing the use of strategic sourcing by agencies, where agencies band together to use their purchasing power to buy commodities – such as paper, copiers, and printers — at a discount.
He called a wedding videographer he knew through a friend and asked him if he’d like to tag along on some school visits. Their first trip to North Star Academy, a charter school in Newark, turned into a five-year project to record teachers across the country. At first, Lemov financed the trip out of his consulting budget; later, Uncommon Schools paid for it. The odyssey produced a 357-page treatise known among its hundreds of underground fans as Lemov’s Taxonomy. (The official title, attached to a book version being released in April, is “Teach Like a Champion: The 49 Techniques That Put Students on the Path to College.”)
I first encountered the taxonomy this winter in Boston at a training workshop, one of the dozens Lemov gives each year to teachers. Central to Lemov’s argument is a belief that students can’t learn unless the teacher succeeds in capturing their attention and getting them to follow instructions. Educators refer to this art, sometimes derisively, as “classroom management.” The romantic objection to emphasizing it is that a class too focused on rules and order will only replicate the power structure; a more common view is that classroom management is essential but somewhat boring and certainly less interesting than creating lesson plans. While some education schools offer courses in classroom management, they often address only abstract ideas, like the importance of writing up systems of rules, rather than the rules themselves. Other education schools do not teach the subject at all. Lemov’s view is that getting students to pay attention is not only crucial but also a skill as specialized, intricate and learnable as playing guitar.
Almost all of the Bank's blogs can be seen in a single format here: http://blogs.worldbank.org. I believe the only exceptions are the PSD Blog and the new blog, All About Finance.
As a general point, I don't think it makes sense to think of all the blogs as a single unit. The Bank is a large institution with experts covering many different areas. If I want to read about finance, I'd rather not have a lot of information on, say, ICT mixed in.
In his memoir Speech-less, Matt Latimer, a speechwriter for both Rumsfeld and Bush, describes Gates as "our Winston Wolf," the Harvey Keitel character in Pulp Fiction who comes to dispose of the bodies and take care of the bloody mess after an accidental killing. "Wolf was a case study of robotic efficiency, overseeing an elaborate cleanup while calmly drinking a cup of coffee," writes Latimer. "That's what President Bush wanted — a cold-blooded competent cleaner."
The cleaner quickly went to work. He walked into the Pentagon alone. Inheriting many former Rumsfeld aides, Gates told them on his first day that he wouldn't be firing anyone. There was no time for confirmations, and he was leaving that day for Iraq. Gates brought a sense of relief, a feeling that an adult was back in charge...
One of the things his staffers love about him is his common sense, I-don't-get-it attitude toward the stupidity of bureaucracy. Now that he's past worrying about climbing within that bureaucracy, he has the confidence to break it. At the height of the Iraq surge in 2007, which Gates supported, more than 100 soldiers a month were dying. It's almost impossible as an outsider to understand why the Pentagon would not want to build the mine-resistant ambush-protected vehicles, known as MRAPs, that would have saved many of those soldiers' lives. Instead of budgeting for MRAPs, the Pentagon was still spending money on outdated weapon systems. So Gates bypassed the normal procurement process, created a special task force, went to Congress and got the money to build them. "Those vehicles saved hundreds of lives and limbs," says a senior Pentagon official...
The list of mindless bureaucratic obstacles that were hampering the war effort was dizzying. For example: military officers complained that there were not enough drones, Predators and unmanned reconnaissance in the air to help target insurgent cells. The holdup? Air Force pilots are taught to fly real planes, not drones. Each pilot costs about $1 million to train. And yet some staff sergeants in the Army had started operating the drones at a fraction of the price, with far fewer crashes. "If the Army is doing it safer and cheaper and able to produce more pilots faster, why aren't we doing it to that standard?" Gates asked. "This requires a cultural revolution in the Air Force," explained one of his staffers — which it got in 2008, after Gates fired the civilian and military leaders of the service for other reasons. Now the Air Force licenses junior officers to fly unmanned aircraft, and Gates has tripled the number of drones operating in the war zones...
Gates is a man of old-school habits: a Grey Goose at the end of the day and preferably steak or bacon cheeseburgers for lunch and dinner. He doesn't use a cell phone. He asked me during our interview if there was tape in my digital recorder. Gates keeps a box filled with index cards of quotes and anecdotes and one-liners he's collected over the years. His favorite comedians are both dead — George Carlin and W.C. Fields. Their sensibilities suit Gates' own — taking down institutions, puncturing pomp. He's even adopted some of their style. He loves to tell the same jokes about egos in Washington — "where people say, I'll double-cross that bridge when I get to it," and "the only place in the world you can see a prominent person walking down lovers' lane holding his own hand."...
At the height of the Iraq surge, Gates gave a speech to the Marine Corps Association. He began in Johnny Carson fashion with a long, meticulously timed story about Nixon's Secretary of Defense Mel Laird on a trip to see the Pope.
Laird was smoking a cigar, and Henry Kissinger told him to at least put it out before they went inside. "A couple of minutes into the Pope's remarks, Kissinger heard this little patting sound, and he looked over, and there was a wisp of smoke coming out of Laird's pocket. The Secretary of Defense was on fire. The American party heard this slapping and thought they were being cued to applaud. And so they did. And Henry later told us, 'God only knows what His Holiness thought, seeing the American Secretary of Defense immolating himself, and the entire American party applauding the fact.' "...
Like Obama, Gates can consume reams of information. His photographic memory is legendary. He is a voracious reader of history, spy novels and pulp fiction. He's subscribed to the Book-of-the-Month Club for 50 years. And he is careful, meticulously so. One decades-long colleague told me Gates will cancel a briefing if he hasn't done his homework. "Preparation for him is a cathartic experience," says his spokesman Morrell. He vents brutal answers to imaginary questions so he can be more diplomatic on the Hill. He's vigilant about the stagecraft of statecraft, even taking his own messy handwritten notes to meetings so his preparation can be seen...
What did Gates ask the President-elect? "I asked him if he could trust me."
Stiglitz, Joseph E/ Reinhart, Carmen M. / Collier, Paul / Eichengreen, Barry J.
/ Wooldridge, Jeffrey M. / Yusuf, Shahid, (World Bank Staff)/ Sen, Amartya /Baum, Christopher F. / Ahmad, Ehtisham / StataCorp LP / Shephard, Neil / Pozen, Robert C./ Hayek, Friedrich A. von (Friedrich August) / Greene, William H. / Gladwell, Malcolm / Fabozzi, Frank J. / Cameron, Adrian Colin
Civil service rationalization. The public sector wage bill has doubled since 2000 primarily due to a rise in the public payroll and, at 22 percent of GDP, is significantly higher than in other countries in the region. The mission welcomed the plan to conduct a comprehensive civil service personnel audit to identify areas of over-staffing and disproportionate pay. Building on the audit’s findings, a combination of civil service pay cuts and reductions in employment should be phased over the near term.
The role of the budget advisor is a complex and challenging one. Developing countries have become much more discerning and demanding in their requirements for technical assistance. More and more they rely on their neighbours and peers to fulfil this role. At the same time, competition among providers of assistance has increased. Against this background, an effective advisor needs to have not only outstanding technical skills and broad international experience but also patience, persistence, resilience, balanced judgment, and diplomatic skills.
* Lead the development (and periodic review) of a draft Vision 2025 (“South Africa Vision 2025”) and long –term national strategic plan for approval by Cabinet (first plan 2010)
* Lead investigations into critical long term trends under the supervision of the Minister in the Presidency for the National Planning Commission, with technical support from a Secretariat and in partnership with relevant other parties
* Advise on key issues such as food security, water security, energy choices, economic development, poverty and inequality, structure of the economy, human resource development, social cohesion, health, defense capabilities and scientific progress
* Assist with mobilizing society around a national vision and other tasks related to strategic planning
* Contribute to reviews of implementation or progress in achieving the objectives of the National Plan
* Contribute to the development of international partnerships and networks of expertise on planning
Planning ministries are quite common in developing countries, but become less common as countries develop. Across the world, there has been a shift from traditional detailed planning, as reflected in 5-year plans and similar instruments, towards strategic coordination. This coordination is increasingly done by finance ministries or by prime ministers’ offices. This is often accompanied by a gradual integration of planning, strategy development and budgeting into a single, coordinated process, and a unified, strategic budget document. Planning ministries were often involved in project preparation, but this function is shifted to line ministries as their capacity develop
The main change in the approach to taxation came from the later integration of public finance into the general area of welfare economics, which was itself a major concomitant of the successful introduction of a utility-maximising approach to exchange in the 1870s. However, the most systematic early developments came from Cohen-Stuart in 1889 (Cohen-Stuart 1958) and Edgeworth (1897) in investigating the broad implications for progressivity of the minimisation of total disutility from taxation—ignoring any possible benefits. With the criterion of minimising total sacrifice, progression arises from decreasing marginal utility, but with equal absolute sacrifice, it depends on the precise behaviour of the marginal utility of income. Even here, there was no explicit independent role for redistribution: the maximand was strictly considered to be total utility.
This movement reached its ultimate conclusion in the 'optimal tax' literature, beginning virtually a century after the initial introduction of a utility analysis into economics. The mathematical analyses of Edgeworth were extended by allowing, in particular, for labour supply incentive effects of taxes and transfers, and including a range of specifications of the objectives of taxation, thus introducing an explicit redistributive role.8 In this final development, most of the important criteria suggested by Smith and others were ignored. The relevant branch of welfare economics into which optimal tax theory falls is the theory of the 'second best', in view of the fact that the government is unable to tax individuals' endowments of ability and instead taxes their incomes. Sometimes, stress is placed on asymmetric information aspects, in that the government cannot observe ability levels
A key lesson from the crisis is the desirability of fiscal space to run larger fiscal deficits when needed. There is an analogy here between the need for more fiscal space and the need for more nominal interest rate room, argued earlier. Had governments had more room to cut interest rates and to adopt a more expansionary fiscal stance, they would have been better able to fight the crisis. Going forward, the required degree of fiscal adjustment (after the recovery is securely under way) will be formidable, in light of the need to reduce debt against the background of aging-related challenges in pensions and health care. Still, the lesson from the crisis is clearly that target debt levels should be lower than those observed before the crisis. The policy implications for the next decade or two are that, when cyclical conditions permit, major fiscal adjustment is necessary and, should economic growth recover rapidly, it should be used to reduce debt-to-GDP ratios substantially, rather than to finance expenditure increases or tax cuts.
The recipe to create additional fiscal space in the years ahead and to ensure that economic booms translate into improved fiscal positions rather than procyclical fiscal stimulus is not new, but it acquires greater relevance as a result of the crisis. Medium-term fiscal frameworks, credible commitments to reducing debt-to-GDP ratios, and fiscal rules (with escape clauses for recessions) can all help in this regard. Similarly, expenditure frameworks based on long-term revenue assessments help limit spending increases during booms. And eliminating explicit revenue earmarking for prespecified budget purposes would avoid automatic expenditure cuts when revenues fall. A further challenge, as governments come under greater pressure to display improved deficit and debt data and are tempted to provide support to ailing sectors through guarantees or off-budget operations, is to ensure that all public sector operations are transparently reflected in fiscal data and that well-designed budget processes reduce policymakers’ incentives to postpone needed adjustment.
I would add, however, that there’s another case for a higher inflation rate — an argument made most forcefully by Akerlof, Dickens, and Perry (pdf). It goes like this: even in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis.
OECD (2008) compares OECD peer reviews with IMF Board discussions and describes differences in focus, in methods of analysis and consequently, in the nature of interactions. The IMF process is characterized as a higher frequency exercise with a shorter-term focus and notes that the country is not necessarily expected to endorse the policy recommendations of a surveillance report, nor does it have much latitude to change or remove topics from a Staff Report. The OECD, on the other hand, engages in a much more intensive exchange with country authorities, both in missions and at headquarters when finalizing its Economic Surveys. It engages in a full day of discussions with the authorities joined by officials from other countries who contribute to the debate with their policy experience, after which the Secretariat works with the country subject to peer review over the course of a full day to finalize the document for publication. Thygesen acknowledges that this buy-in may result in a reduction of clarity in issues or key messages in the report. He also suggests that the peer review process only works well if there is a high and matched level of expertise brought by country representatives around the table so that the authorities undergoing the peer review can truly benefit from the discussion. OECD (2007) discusses the prerequisites of value sharing, mutual trust and credibility in the process adding that the peer review is as effective as the “peer pressure” stemming from the reviewer countries, and the willingness of the reviewed country to accept it
In a recent comment, Barry Eichengreen (2009) says that economists are subject to fads and trends because the penalties for departing from social norms are large. Hence, even though the tools and perspectives to question the prevailing normative view are available, the incentives to adopt them are minimal...
Rakesh Mohan sees such pragmatism as the key role of a practising economist. It is in the practice of economics that the rubber, so to speak, hits the road, the theories are tested, the validity of parameters is assessed, and the cold reality of politics is faced. He speaks of the recurring conflicts in objectives faced by policymakers. In resolving these conflicts, he questions and prods, often pushing back on views widely held by academic and other practising economists. In his practice, Mohan reports, the Eichengreen challenge was always present. But because the risk of being marginalised is high, bucking the orthodoxy requires clarity of perspective and determined persistence. Both of these are amply in view in this book, which brings the speeches Mohan delivered as deputy governor of the Reserve Bank of India (RBI) from the early years of this decade, along with an extensive introduction and an “after word” that reports on the ongoing global financial and economic crisis...
For students of the Indian economy who also seek a special understanding of India’s monetary and financial policies, this book will be an invaluable guide. It presents a careful and current account of developments with an analytical eye, placed in the context and language of ongoing international policy debates. For readers seeking to assess the pulse and rhythm of India’s ginger steps from the safety of domestic finance to the choppier waters of international finance, the book offers a calibrated prognosis.
The closing date:February 14, 2010
The Advisor will:
* Review appropriateness of MOF macroeconomic model for macro-fiscal analysis and forecasting.
* Review the process for integrating the MOF macroeconomic model to the revenue projections model and medium term fiscal framework (MTFF)
* Document data requirements for model and assist MOF in developing MOU's with DAB and statistical agency for the periodic provision of updated data for the model.
* Develop manuals and training materials to assist in building the knowledge and expertise of MOF staff in use of the Macroeconomic model.
* Provide coaching, formal training and mentoring to MOF staff in the use of the model.
