17 July, 2018: The Indian Institute of Management Bangalore hosted the Annual Conference by Society for Economic Research in India (SERI) on 14th and 15th July 2018 at the IIMB campus. The main objective of the annual SERI conference is to showcase top research papers of Indian economists each year. It allows the papers to be presented in a standard seminar format in order to receive extensive feedback and suggestions. The idea is to stress on quality in terms of presentation and interaction. In the process, the hope is to build a strong network of Indian economists doing research at the global frontier. Past conferences have been conducted in ISB –Hyderabad, IGIDR and Ashoka University.
Welcoming the participants and the delegates to IIMB, Prof. Gopal Naik, Dean, Faculty, said: “In our country, solution implementation has been a major setback. Through these papers, we should provide the community of decision- and policy-makers relevant solutions that are easy to implement.”
Tushar Nandi, Assistant Professor of Economics, Centre for the Study of Social Sciences (CSSS), Kolkata, presented his paper titled, ‘Taxation and Suppliers Network: Evidence of West Bengal’. This paper considers the implications of the Value Added Tax (VAT) policy for supply chain efficiency using administrative tax data on the universe of firms paying taxes in West Bengal, India, between 2010 and 2015, and finds that VAT decreases the efficiency of supply networks in economies in which some firms do not pay VAT – because they are informal, or because the tax system allows for an alternative to VAT for some types of firms.
Bikramaditya Datta, Assistant Professor, Department of Economic Sciences, IIT Kanpur, presented his paper titled, ‘Delegation and Learning’. The paper deals with a principal who contracts with an agent whose ability is uncertain. Ability is learnt through the agent’s performance in projects that the principal finances over time. The paper characterizes the optimal sequence of rewards in this relationship that tolerates an endogenously determined finite number of failures and incentivizes the agent to implement only good projects by specifying rewards for success as a function of past failures. The optimal contract resembles the arrangements used in venture capital, where entrepreneurs must give up equity share in exchange for further funding following failure.
Tirthatanmoy Das, Assistant Professor, Economics & Social Sciences, IIM Bangalore, presented his paper (coauthored with Kabir Das Gupta) titled, ‘Evaluating the Impact of Mothers' Self-esteem on Early Childhood Home Environment: Evidence from the NLSY’. Using the orthogonalization technique to 2SLS-IV regressions to overcome the endogeneity issue, this paper estimates the causal effects of parental characteristics on determinants of child outcomes using is complicated due to endogeneity problems. Results show that a rise in mothers’ self-esteem improves children’s home environment conditions that promote cognitive and emotional developments, with larger effects observed among mothers in socio-economically disadvantaged families.
Murali Srinivasan, Assistant Professor, Economics & Social Sciences, IIM Bangalore, presented his paper titled, ‘Job Specialisation and Labour Market Turnover’. The paper investigates the reasons for decline in labor market turnover in the recent decades, in particular the fall in job finding and separation rates. The model shows that as job specialization increases, well-matched firms and workers choose to remain in their matches longer which increases the proportion of well-matched workers and firms, which in turn results in a decline in labor market turnover.
Pawan Gopalkrishnan, Reserve Bank of India, presented a paper titled, ‘Fiscal Austerity in Emerging Market Economies’. The paper analyzes the expansionary fiscal consolidations in emerging market economies using Real Business Cycle models. The paper shows that when factor income tax rates are high, a contractionary fiscal shocks has an expansionary effect on output if government spending is valued sufficiently highly relative to private consumption by households in utility. The paper also identifies the mechanisms behind these results.
The last session of the day was on ‘The Long Road to Health: Healthcare Utilitizaion Impacts of a Road Pavement Policy in Rural India’, a paper presented by Shilpa Aggarwal, Assistant Professor of Economics and Public Policy, ISB, Hyderabad. The paper exploits a plausibly exogenous variation in road pavement in rural India to provide 3 pieces of evidence on healthcare access and health outcomes. The paper found that road construction improved access to healthcare facilities, leading to higher rates of institutional antenatal care and deliveries, which translated into better medical care, and expanded vaccination coverage.
Day 2 presentations
On Sunday, papers were presented on credit shocks and difference between micro firms and small firms; social reform as a path to political leadership; women as better borrowers in micro finance; and the role of land in growth.
Megha Patanaik, Assistant Professor, Indian Statistical Institute, Delhi, presented a paper titled, ‘The Impact of Credit Shocks: Micro versus Small Firms’. Using novel data from the leading online accounting software in the United States, the paper measure firms’ responses to shocks in credit supply during the Great Recession. The results indicate that bank failures are associated with declines in credit for small firms but not micro firms. But in contrast, house price movements are associated with credit changes for micro firms but not small firms.
Souvik Dutta, Assistant Professor, Economics & Social Sciences, IIM Bangalore, presented a paper (coauthored with Manaswini Bhalla and Kalyan Chatterjee) titled, ‘Social Reform as Path to Political Leadership: A Dynamic Model’. The paper studies the optimal strategy of a leader who wishes to overthrow an unpopular ruling government. The study finds that for intermediate ranges of the ability of the leader, the optimal strategy is to pursue gradualism in following non-political protests initially to favorably update the belief about his ability and mobilize a higher participation for the political protest. But in contrast, the model shows that for very low and high values of the ability of the leader, it is optimal to do the political protest in the first period.
Shagata Mukherjee, Assistant Professor, Meghnad Desai Academy of Economics, presented a paper titled, ‘Are Women Really Better Borrowers in Micro Finance? Evidence from Matrilineal and Patrilineal Societies in India. The paper asks if women are wired naturally and fundamentally different than men to be better borrowers or is it the social context in which the gender roles operate that motivate their behavior? The paper finds that women have a significantly lower default in the patrilineal society but significantly higher default in the matrilineal society compared to their male counterparts.
Anuradha Saha, Assistant Professor, Economics, Ashoka University, presented a paper titled, ‘Non-Balanced Growth: The Role of Land’. 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 and finds that short run land intensity differences play a larger role in explaining non-balanced growth and in long run the capital intensity differences have a larger explanatory power.
The workshop was a success in bringing together participants from all premier institutes in India. The workshop was conceived to allow greater engagement than is possible under the usual conference format. In that spirit, there were extensive engagements, discussions, and debate, benefitting the papers and setting the stage for further research collaborations and engagements.
Click here for the photo gallery.
For more on SERI, go to www.seri-india.org
17 July, 2018: The Indian Institute of Management Bangalore hosted the Annual Conference by Society for Economic Research in India (SERI) on 14th and 15th July 2018 at the IIMB campus. The main objective of the annual SERI conference is to showcase top research papers of Indian economists each year. It allows the papers to be presented in a standard seminar format in order to receive extensive feedback and suggestions. The idea is to stress on quality in terms of presentation and interaction. In the process, the hope is to build a strong network of Indian economists doing research at the global frontier. Past conferences have been conducted in ISB –Hyderabad, IGIDR and Ashoka University.
Welcoming the participants and the delegates to IIMB, Prof. Gopal Naik, Dean, Faculty, said: “In our country, solution implementation has been a major setback. Through these papers, we should provide the community of decision- and policy-makers relevant solutions that are easy to implement.”
Tushar Nandi, Assistant Professor of Economics, Centre for the Study of Social Sciences (CSSS), Kolkata, presented his paper titled, ‘Taxation and Suppliers Network: Evidence of West Bengal’. This paper considers the implications of the Value Added Tax (VAT) policy for supply chain efficiency using administrative tax data on the universe of firms paying taxes in West Bengal, India, between 2010 and 2015, and finds that VAT decreases the efficiency of supply networks in economies in which some firms do not pay VAT – because they are informal, or because the tax system allows for an alternative to VAT for some types of firms.
Bikramaditya Datta, Assistant Professor, Department of Economic Sciences, IIT Kanpur, presented his paper titled, ‘Delegation and Learning’. The paper deals with a principal who contracts with an agent whose ability is uncertain. Ability is learnt through the agent’s performance in projects that the principal finances over time. The paper characterizes the optimal sequence of rewards in this relationship that tolerates an endogenously determined finite number of failures and incentivizes the agent to implement only good projects by specifying rewards for success as a function of past failures. The optimal contract resembles the arrangements used in venture capital, where entrepreneurs must give up equity share in exchange for further funding following failure.
Tirthatanmoy Das, Assistant Professor, Economics & Social Sciences, IIM Bangalore, presented his paper (coauthored with Kabir Das Gupta) titled, ‘Evaluating the Impact of Mothers' Self-esteem on Early Childhood Home Environment: Evidence from the NLSY’. Using the orthogonalization technique to 2SLS-IV regressions to overcome the endogeneity issue, this paper estimates the causal effects of parental characteristics on determinants of child outcomes using is complicated due to endogeneity problems. Results show that a rise in mothers’ self-esteem improves children’s home environment conditions that promote cognitive and emotional developments, with larger effects observed among mothers in socio-economically disadvantaged families.
Murali Srinivasan, Assistant Professor, Economics & Social Sciences, IIM Bangalore, presented his paper titled, ‘Job Specialisation and Labour Market Turnover’. The paper investigates the reasons for decline in labor market turnover in the recent decades, in particular the fall in job finding and separation rates. The model shows that as job specialization increases, well-matched firms and workers choose to remain in their matches longer which increases the proportion of well-matched workers and firms, which in turn results in a decline in labor market turnover.
Pawan Gopalkrishnan, Reserve Bank of India, presented a paper titled, ‘Fiscal Austerity in Emerging Market Economies’. The paper analyzes the expansionary fiscal consolidations in emerging market economies using Real Business Cycle models. The paper shows that when factor income tax rates are high, a contractionary fiscal shocks has an expansionary effect on output if government spending is valued sufficiently highly relative to private consumption by households in utility. The paper also identifies the mechanisms behind these results.
The last session of the day was on ‘The Long Road to Health: Healthcare Utilitizaion Impacts of a Road Pavement Policy in Rural India’, a paper presented by Shilpa Aggarwal, Assistant Professor of Economics and Public Policy, ISB, Hyderabad. The paper exploits a plausibly exogenous variation in road pavement in rural India to provide 3 pieces of evidence on healthcare access and health outcomes. The paper found that road construction improved access to healthcare facilities, leading to higher rates of institutional antenatal care and deliveries, which translated into better medical care, and expanded vaccination coverage.
Day 2 presentations
On Sunday, papers were presented on credit shocks and difference between micro firms and small firms; social reform as a path to political leadership; women as better borrowers in micro finance; and the role of land in growth.
Megha Patanaik, Assistant Professor, Indian Statistical Institute, Delhi, presented a paper titled, ‘The Impact of Credit Shocks: Micro versus Small Firms’. Using novel data from the leading online accounting software in the United States, the paper measure firms’ responses to shocks in credit supply during the Great Recession. The results indicate that bank failures are associated with declines in credit for small firms but not micro firms. But in contrast, house price movements are associated with credit changes for micro firms but not small firms.
Souvik Dutta, Assistant Professor, Economics & Social Sciences, IIM Bangalore, presented a paper (coauthored with Manaswini Bhalla and Kalyan Chatterjee) titled, ‘Social Reform as Path to Political Leadership: A Dynamic Model’. The paper studies the optimal strategy of a leader who wishes to overthrow an unpopular ruling government. The study finds that for intermediate ranges of the ability of the leader, the optimal strategy is to pursue gradualism in following non-political protests initially to favorably update the belief about his ability and mobilize a higher participation for the political protest. But in contrast, the model shows that for very low and high values of the ability of the leader, it is optimal to do the political protest in the first period.
Shagata Mukherjee, Assistant Professor, Meghnad Desai Academy of Economics, presented a paper titled, ‘Are Women Really Better Borrowers in Micro Finance? Evidence from Matrilineal and Patrilineal Societies in India. The paper asks if women are wired naturally and fundamentally different than men to be better borrowers or is it the social context in which the gender roles operate that motivate their behavior? The paper finds that women have a significantly lower default in the patrilineal society but significantly higher default in the matrilineal society compared to their male counterparts.
Anuradha Saha, Assistant Professor, Economics, Ashoka University, presented a paper titled, ‘Non-Balanced Growth: The Role of Land’. 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 and finds that short run land intensity differences play a larger role in explaining non-balanced growth and in long run the capital intensity differences have a larger explanatory power.
The workshop was a success in bringing together participants from all premier institutes in India. The workshop was conceived to allow greater engagement than is possible under the usual conference format. In that spirit, there were extensive engagements, discussions, and debate, benefitting the papers and setting the stage for further research collaborations and engagements.
Click here for the photo gallery.
For more on SERI, go to www.seri-india.org