Below is given the Table of Contents of the
Issues listed above:
Volume 56.
No 2. July-Sept, 2008
ARTICLES
/ 1
Some Reflections on the
Comparability of Real National
Incomes of Industrialised
and Underdeveloped Countries V.K.R.V. Rao
This paper deals with the important
issue of comparing national incomes
of the economies that are diverse in
terms of factors, such as, their
stages of development, tastes and
preferences, concept of human
welfare, social and cultural
environments, and lifestyles. The
discussion focuses essentially on
the problems of comparing the
national income of an
‘industrialised country’, such as,
United States of America and that of
an ‘underdeveloped country’ like
India. The specific issues, dealt
with in this paper, cover a wide
range of topics, such as,
non-monetary items in the national
income, net versus gross incomes,
national income and economic
welfare, the problems of valuation,
and the dilemmas of exchange rate
adjustments. The discussion of the
analytical issues as also of the
empirical estimation problems, given
here is of great contemporary value
to the debate on the subject, even
after more than 50 years of the
publication of this seminal paper by
Dr. V.K.R.V. Rao.
This paper was originally published
in Volume III of the International
Income and Wealth Series, way back
in 1953 and it has been reproduced
here with the permission of the
International Association for
Research in Income and Wealth.
ARTICLES
/ 2
Redistribution of Income and
Economic
Growth in Underdeveloped Countries V.K.R.V. Rao
This paper discusses the interesting
issue of the relationship between
the nature and the pattern of
distribution of income, on the one
hand, and the level and pattern of
growth, on the other. The author
begins by arguing that "in the
literature on redistribution of
income, the subject is usually
viewed from the point of view of
social justice and the leveling down
of inequalities", while in this
paper, "however, redistribution of
income is approached from another
angle; namely, its relation to
economic growth in underdeveloped
countries". He points out that
"economic growth is linked with,
inter alia, savings, investment, and
entrepreneurial activity and that
distribution of income in the
community is linked with all these
factors". After discussing the
various issues in the wider context
of an underdeveloped country, the
paper provides a critical insight
into the experience of India in the
first decade of her planned
development process, during 1951-52
to 1959-60.
This paper was originally published
in the Income and Wealth Series X,
of 1964, and it
has been reproduced here with the
permission of the International
Association of Research in Income
and Wealth.
ARTICLES / 3
Investment, Income and the
Multiplier in an Underdeveloped
Economy* V.K.R.V. Rao
The paper begins by providing a very
cogent and comprehensive account of
the main findings and policy
implications of the famous Keynesian
Multiplier Theory. The author has
brought out, through his analytical
and perceptive arguments that the
validity of the Keynesian Multiplier
Theory, depends upon various crucial
assumptions, most which are not
valid in the case of underdeveloped
countries. He argues that these
assumptions include, inter alia, the
following: existence of involuntary
unemployment, upward sloping supply
curve, existence of excess capacity
in the consumption-goods industries,
and comparatively elastic supply of
the working capital, required for
increased output. The paper brings
out a path breaking result as
follows: "a consequent blind
application of the Keynesian formulæ
to the problems of economic
development has inflicted
considerable injury on the economies
of underdeveloped countries and
added to the forces of inflation
that are currently afflicting the
whole world. The old-fashioned
prescription of ‘work harder and
save more’ still seems to hold good
as the medicine for economic
progress, at any rate as far as the
underdeveloped countries are
concerned". The conclusions of this
seminal paper have generated wide
debate on the relevance of the
Keynesian Multiplier Theory for
development in the underdeveloped
countries, like India.
This paper was originally published
in the Indian Economic Review,
February, 1952 and
is reproduced here with their
permission.
ARTICLES
/ 4
Inter-temporal Comparisons of Real
National Income An International
Survey J.B.D. Derksen
This paper provides a survey of the
alternative approaches adopted in
the literature of 1950s, for making
international comparisons of real
national incomes. It raises many
conceptual, methodological and
empirical issues, in regard to the
complex task of "estimating national
income in constant prices". The
discussion contained in this paper
is, in our opinion, a good
complement to that contained in the
seminal paper of
Dr. V.K.R.V. Rao, entitled,
"Reflections on international
comparisons of real national incomes
of industrialised and
under-developed countries". It has
been included in this special issue
of the Journal, with the objective
of generating debate on the
contemporary methods (used in the
years 2007-08) of making
international and inter-temporal
comparisons of national incomes. We
welcome special articles from the
experts in the field, giving
reflections on the development of
methodology since the time of the
articles, included in this issue of
the Journal, when specific
analytical issues were raised (in
the 1950s).
This paper was originally published
in the Income and Wealth Series 1
(1951)
(pp.245-266) of the International
Association of Research in Income
and Wealth, edited by Erik Lundberg,
and it has been reproduced here with
the permission of the International
Association of Research in Income
and Wealth.
The present paper is an extended and
revised version of a preliminary
draft read before the Econometric
Society, Cleveland, Ohio, 28th
December 1948
ARTICLES
/ 5
The Nature and Purpose of Economic
Activity V.K.R.V. Rao
This article is the text of the
lecture delivered by Dr. V.K.R.V.
Rao, on the special occasion of the
Foundation Day of Delhi School of
Economics, in the year 1963. Dr.
V.K.R.V. Rao was the founder of
Delhi School of Economics and as
such, this perceptive address
containing his seminal thoughts, on
the question as to what constitutes
"Economic Activity" assumes special
significance for the entire economic
profession. After critically
examining the inadequacies of the
"orthodox economist’s view of the
purpose of economic activity and the
criterion of economy which he seeks
to apply", the author proceeds, the
author provides his own view of the
content and purpose of economic
activity, in a much wider setting.
He spells out his views in the
following words: "Economic activity
is of the nature of both ends and
means activity; and its purpose is
to secure exchangeable goods and
services possessing economic value
but in such manner as: (a) to
satisfy the fundamental minimum
requirements of the community for
economic goods, (b) to occasion the
minimum use of resources and ensure
avoidance of waste in each act of
production, and (c) not to hamper
but to foster and promote the end of
all human activity, viz., the
development of human personality".
It is our hope that this ‘holistic’
conception of ‘economic activity’
would generate some useful debate on
the ‘somewhat partial’ framework of
the course of development that is
manifesting itself, in the
contemporary world characterised by
the predominance of ‘materialism’,
‘consumerism’, market forces, and
neglect of ‘human face’.
ARTICLES
/ 6
The Problem of Relevance in
Social Science Research
An Introductory Exposition V.K.R.V. Rao
This paper was originally presented
as an inaugural address delivered by
Dr. V.K.R.V. Rao, at a Seminar,
organised by the Institute of
Economic Growth, New Delhi, in April
1980, on the theme entitled,
"Relevance in Social Science
Research". The basic objective of
the said Seminar was to undertake
some sort of self appraisal, by the
researchers in social sciences in
regard to the "social relevance" of
their research. The themes covered
in the Seminar included not only the
general issues of conceptual and
practical nature, but also specific
issues covering the sectors, such
as, agriculture, population, trade,
and industry. In this paper, Dr. Rao
has dealt with many analytical and
practical questions, such as, the
meaning of relevance, the factors
causing lack of relevance,
usefulness in policy making and
further areas of research in
specific fields. It is our view that
the "problem of relevance" is still
a vexed question in the social
science research in the contemporary
period, as well and we hope that
this perceptive paper of
Dr. V.K.R.V. Rao would generate
fresh debate on the subject and
thereby help the cause of making
social science research, hitherto
"more relevant".
This paper was originally published
in the Volume entitled "Relevance in
Social Science
Research: A Colloquium", Institute
of Economic Growth, New Delhi, in
1980.
ARTICLES
/ 7
Reflection on Economic Policies in
the Post-Independence India V.K.R.V. Rao
This paper is the Presidential
Address, delivered by Dr. V.K.R.V.
Rao, at the 32nd annual
Conference of the Indian Economic
Association, held in Waltair, in
1959.
Dr. V.K.R.V. Rao, brings out, in his
own enviable style, the contours of
the challenges of development, that
India was facing in her immediate
post-Independence period, provides a
critical appraisal of the policies
of the Government during the period
of 27 months since Independence and
spells out a comprehensive agenda of
the initiatives that deserve
attention. This address is a
masterpiece of analysis and
information in economic history and
in our view, the perceptions on
policy and development paradigm,
that are given here, deserve serious
debate and attention, even in the
context of the challenges of
development, that India is facing,
in the context of the new
development paradigms of
liberalisation, privatisation and
globalisation, at the beginning of
the twenty-first century.
ARTICLES
/ 8
An Introduction to Mechanism
Design Theory Debasis Mishra
The Nobel Prize in Economics was
awarded to Leonid Hurwicz, Roger B.
Myerson, and Eric S. Maskin in 2007
for “having laid the foundations of
mechanism design theory.” This
article aims to explore these very
foundations of mechanism design
theory. In the process, it
highlights one important
contribution each of Myerson and
Maskin, and describes some
fundamental concepts of mechanism
design, which are due to Hurwicz.
While it briefly describes Maskin’s
Nash implementation work, it goes
into the details of Myerson’s
optimal auction design work, its
extensions, and ongoing work.
Debasis Mishra, Indian Statistical
Institute, New Delhi. Email:
dmishra@isid.ac.in
ARTICLES
/ 9
Import Penetration and Price-Cost
Margins
in Indian Manufacturing Industries Bishwanath Goldar and Atsushi
Kato
The impact of import liberalisation
on price-cost margins in Indian
manufacturing industries in the
post-reform period is analysed
econometrically using firm-level
data for eight industries for the
period 1991-92 through 2001-02.
Price-cost margins are regressed on
refined measures of import
competition and some other
explanatory variables. The results
show a negative effect of import
penetration on the price-cost
margins of Indian firms. Based on
the econometric results, together
with the observed upward trends in
import penetration ratios during the
post-reform period, the paper
concludes that trade liberalisation
in India had a depressing effect on
the price-cost margins of domestic
firms, consistent with the
imports-as-market-discipline
hypothesis. Moreover, it is shown
that the adverse effect of import
penetration on price-cost margins
was smaller for firms with larger
market shares. This result is at
variance with the findings of
earlier empirical studies, but in
line with recent theoretical work.
Bishwanath Goldar, Institute of
Economic Growth, Delhi. Email:
bng@iegindia.org
Atsushi Kato, School of Management,
Aoyama Gakuin University, Tokyo.
REVIEW
ARTICLE / 1
Poverty of Economics
India and the Poverty Dilemma
(K.K. Sinha. 2006. Rs. 600. pp.234.
New Delhi: Manak Publication Pvt.
Ltd.)
Ajit Kumar Sinha
Former President of Indian Economic
Association
REVIEW
ARTICLE / 2
State, Markets and Inequalities
Human Development in Rural India
(Shariff and Krishnaraj. 2007. Rs.
975. pp.784. New Delhi: Orient
Longman Pvt. Ltd.)
Shipra Maitra
Professor
School of Urban Management, Amity
University, UP.
