Views of a Nepali Economist

Mechi-mahakali electric railway: Govt invites EoI for DPR of two sections

The Department of Railways has invited expression of interest (EoI) for the detailed project report (DPR) of two sections of the Mechi-Mahakali Electric Railway—Simara-Tamsaria (114 km) and Tamsaria-Butwal-Madhawaliya-Bhairahawa (109 km).

Indian cabinet clears costly food subsidy bill As an economist, I don't like direct food subsidy. Direct cash subsidy is a better and cheaper alternative to handing out food. I have absolutely no idea why an economist (Prime Minister Man Mohan Singh) would support this initiative.

The food security bill carries enormous political significance for Prime Minister Manmohan Singh's coalition government, which was re-elected in 2009 on the back of a strong pro-poor platform.

Nepal and Others Mull Monsanto’s Role in Advancing Agriculture

Inland Revenue Department slaps Rs. 3.88 billion in taxes, fine to 435 VAT bill evaders

Upwardly mobile Will China Break?

The most striking thing about the Chinese economy over the past decade was the way household consumption, although rising, lagged behind overall growth. At this point consumer spending is only about 35 percent of G.D.P., about half the level in the United States.

Don’t Tax the Rich. Tax Inequality Itself.

...In 1980, the wealthiest 1 percent of Americans made 9.1 percent of our nation’s pre-tax income; by 2006 that share had risen to 18.8 percent ...In 1980 the average 1-percenter made 12.5 times the median income, but in 2006 (the latest year for which data is available) the average income of our richest 1 percent was a whopping 36 times greater than that of the median household....

The Exchange-Rate Delusion

...the real (inflation-adjusted) value of the renminbi is now rising quickly, owing to inflation differentials and Chinese wage growth, particularly in the country’s export sectors. That will shift the Chinese economy’s structure and trade patterns quite dramatically over time. The final-assembly links of global-value added chains will leave China for countries at earlier stages of economic development, such as Bangladesh, where incomes are lower (though without producing much change in the balance with the US)....

...The focus on currencies as a cause of the West’s economic woes, while not entirely misplaced, has been excessive. Developing countries have learned over time that real income growth and employment expansion are driven by productivity gains, not exchange-rate movements. This, in turn, requires public and private investment in tangible assets, physical and telecommunications infrastructure, human capital and skills, and the knowledge and technology base of the economy.

What Can Save the Euro?

It is increasingly evident that Europe’s political leaders, for all their commitment to the euro’s survival, do not have a good grasp of what is required to make the single currency work. The prevailing view when the euro was established was that all that was required was fiscal discipline – no country’s fiscal deficit or public debt, relative to GDP, should be too large. But Ireland and Spain had budget surpluses and low debt before the crisis, which quickly turned into large deficits and high debt. So now European leaders say that it is the current-account deficits of the eurozone’s member countries that must be kept in check.