Quick Thoughts on Google Chat

I’ve been a fan of Google ever since I saw for myself how much better the search engine (how quaint, no?) was compared to the alternatives, and I’m old enough to remember what a revelation 1GB of storage was for inboxes. Chrome in 2008 was a game changer, I’m an unabashed Android fan, and I spend more than half my life in Google Drive.

I’ll never, ever, ever forgive them for their cold blooded murder of Google Reader, but let’s not get hung up on that for now. Feedly is here and it works just fine.

But what was a hobby (learning more about how cool Google can be) suddenly became an utter necessity when the pandemic took over our lives last year. Working remotely has been a challenge for all of us, and utilizing all of Google’s features was no longer a luxury, but a necessity.

Figuring out how to get your colleagues (and in my case, our students) to learn how to use all of Google’s features has been both a challenge and a pleasure, and most of us at the Gokhale Institute are now fairly comfortable with the following tools/apps: GMail, Google Calendar, Google Classroom and Google Drive.

What especially helped was their decision to launch the sidebar on the right, in GMail, that allowed for most (but not all!) of these tools to be accessible from within just the one tab.

One feature in particular that we’ve made fairly heavy use of has been a separate tab for Google Chat (go to chat.google.com). Most of us know Google Chat as that little box on the left in our GMail tabs, but the separate stand-alone tab is much better. You could have chat rooms (about which more in a bit). But most importantly, a separate tab made more sense because visually, chatting was easier in a separate tab rather than those little pop-up windows in GMail.

That apart, the ability to use “bots”, such as Polly for conducting polls and the Meeting bot for setting up meetings1 has been really helpful this past year.

But yesterday, they announced some serious updates to all of these features. Dieter Bohn has a quick explainer at The Verge, but as is usual with Google, the full feature set will be “coming soon”. But here are my quick reflections on whatever it is that we’re able to to do right now. Note that I work in a university, not a conventional office. YMMV, as they say:

  1. Starting projects with colleagues/students is much better in a chat room in Google Chat than via email. The discussion happens much more quickly, responses are searchable, and threaded discussions make it much more convenient.
  2. There are three tabs available up top in all chatrooms: the actual chat itself, files and tasks. Files shared in the chat room are now available to see at any point of time, and now they even open up right there, in the chat window. Much more convenient. Note that seeing comments etc requires the document to be opened up in a separate window/tab. Tasks is basically Google Tasks (a tool which almost nobody uses), but assigned to work for the group that is in that particular chat room. Tasks, used as a group, is much better than Tasks in GMail. A richer feature set here would be awesome, but that’s another blogpost by itself.
  3. Add in the Polly and Meeting bots to your chat rooms (and please let me know if you know of other good bots to deploy)
  4. Stuff I wish they’d add: the ability to pick a message and reply specifically to it (as in Whatsapp) is sorely missed. Conversations would be so much more streamlined if this was around.
  5. Chatrooms are searchable by person and by date, among other things. The trouble is that most people won’t know that this is possible, and Chat doesn’t (yet) have the drop-down menu in search like GMail. Most folks don’t know about the drop-down menu in GMail search, but that’s another story.
  6. Google Chat now has the same bar to the right that GMail does: Calendar, Tasks and Keep show up over there. Education specific request: throw in Classroom there too?
  7. While we’re at it, why can’t all Classrooms automatically have chat rooms created? Why can’t files shared on Classroom automatically sync with this chat room? Why can’t assignments given in Google Classroom automatically sync as tasks in these chatrooms? This would help so much!
  8. Setting up a calendar appointment, or starting a Google Meet call is possible from within the little box you use to type messages in Google Chat. When you set up a calendar invite, it automatically invites all participants in that chat, which is great.
  9. My own personal workflow involves Feedly, Roam, GChat, GDocs, GDrive, GCal. Hopefully, API’s will allow one to add in Roam and Feedly on to the sidebar in the near future. If that becomes possible, I’m happy to live entirely inside Google Chat when I’m working, with minor excursions into the Twitter tab every now and then. From a purely selfish perspective, maybe Google can buy out Feedly and Roam (hint, hint)? Keep as a note-taking tool just isn’t good enough!
  10. Finally, any educational institute anywhere: if you need help learning about this, or setting it up, or just a call where you want to see how we use these tools at the Gokhale Institute, I’m just a shout away. Happy to help, any time 🙂
  1. it is a life changer once you get the hang of it, trust me. It uses NLP, and you can type stuff like “set up a meeting with xyz at ten am tomorrow morning” and it does the rest. Yes, really. It is an old feature, used to be available in Google Calendar years ago, but is now sadly missing from there[]

Correlation, Causation, Coffee…

… and so much else besides!

Alexey Guzey’s newsletter is a treasure trove of interesting things he finds on Twitter, and in Guzey’s case, interesting is an understatement.

But even by his high standards, the article I am sharing with you today is something else altogether.

Said article begins the same way most articles I have shared here:

“The break point in America is exactly 1973,” says economist Tyler Cowen, “and we don’t know why this is the case.” One possible culprit is the 1973 oil embargo, because many of these trends have to do with energy. But Cowen doesn’t think this holds water. “Since that time, the price of oil in real terms has fallen a great deal,” he says, “and productivity has not bounded back.”
Another possible culprit is the US going off the gold standard in 1971, part of the set of measures known as the Nixon shock (also the name of our new Heavy Metal band). This makes some sense because many of these trends have to do with the economy. But it’s not clear if this is a good explanation either, as many of these trends seem to be global, and most of the world is not on the US dollar.

https://slimemoldtimemold.com/2021/04/19/higher-than-the-shoulders-of-giants-or-a-scientists-history-of-drugs/

But it then takes on a life of its own. And if this excerpt doesn’t make you curious to read more, nothing ever will.

Bier of course was a surgeon, and so when it was his turn to give Hildebrandt the injection, he performed it flawlessly. Soon Hildebrandt was very anaesthetized. To test it, reports Regional Anaesthesia, “Bier pinched Hildebrandt with his fingernails, hit his legs with a hammer, stubbed out a burning cigar on him, pulled out his pubic hair, and then firmly squeezed his testicles,” all to no effect. In a different account, this last step was described as “strong pressure and traction to the testicles”. They also pushed a large needle “in down to the thighbone without causing the slightest pain”, and tried “strong pinching of the nipples”, which could hardly be felt. They were thrilled. With apparently no bad blood over this series of trials, the two gentlemen celebrated that evening with wine and cigars, and woke up the next morning with the world’s biggest pair of headaches, which confined them to bed for 4 and 9 days, respectively.

https://slimemoldtimemold.com/2021/04/19/higher-than-the-shoulders-of-giants-or-a-scientists-history-of-drugs/

The whole article is impossibly fascinating, and is peppered with Today I Learnt moments. Along with the surgeon above, Tesla (as in the scientist, not the firm), Robert Louis Stevenson, Freud, and the Beatles also make guest appearances – as do two Popes.

Please, do read.

On X-Inefficiency

Yesterday, I wrote this in my summary of Bloom and co-authors’ paper on productivity in India:

Economists tend to not buy into this because they assume that profit maximization implies cost minimization
So in other words, if firms are not minimizing costs by adopting good management practices, it is because “wages are so low that repairing defects is cheap. Hence, their management practices are not bad, but the optimal response to low wages.”

https://econforeverybody.com/2021/02/23/notes-from-does-management-matter-evidence-from-india-by-bloom-et-al/

… which brought to mind of the topic of X-inefficiency, for the second time this year. The first was when Tyler Cowen wrote about it in January. Here’s Wikipedia:

X-inefficiency is the divergence of a firm’s observed behavior in practice, influenced by a lack of competitive pressure, from efficient behavior assumed or implied by economic theory. The concept of X-inefficiency was introduced by Harvey Leibenstein

https://en.wikipedia.org/wiki/X-inefficiency

X-inefficiency, in essence, is the idea that the economic theory idea about efficient firms in efficient markets is perhaps a little overblown. Here’s a quote from the paper itself:

The simple fact is that neither individuals nor firms work as hard, nor do they search for information as effectively, as they could. The importance of motivation and its association with degree of effort and search arises because the relation between inputs and outputs is not a determinate one. There are four reasons why given inputs cannot be transformed into predetermined outputs: (a) contracts for labor are incomplete, (b) not all factors of production are marketed, (c) the production function is not completely specified or known, and (d) interdependence and uncertainty lead competing firms to cooperate tacitly with each other in some respects, and to imitate each other with respect to technique, to some degree.

Leibenstein, Harvey. “Allocative Efficiency vs. ‘X-Efficiency.’” The American Economic Review, vol. 56, no. 3, 1966, pp. 392–415. JSTOR, http://www.jstor.org/stable/1823775

By the way, the entire paper is worth reading, because it contains multiple delightful nuggets. The Hawthorne effect, which I mentioned in yesterday’s blogpost makes an appearance, and it also helps one understand why microeconomic textbooks are a very poor way to learn about the real world. Consider this delightful quote, for example:

One idea that emerges from this study is that firms and economies do not operate on an outer-bound production possibility surface consistent with their resources. Rather they actually work on a production surface that is well within that outer bound.

Leibenstein, Harvey. “Allocative Efficiency vs. ‘X-Efficiency.’” The American Economic Review, vol. 56, no. 3, 1966, pp. 392–415. JSTOR, http://www.jstor.org/stable/1823775

OK, so people and firms are both not as efficient as econ textbooks make them out to be. This is not, to put it politely, headline material in the non-econ world. What might be potential solutions?

In situations where competitive pressure is light, many people will trade the disutility of greater effort, of search, and the control of other peoples’ activities for the utility of feeling less pressure and of better interpersonal relations. But in situations where competitive pressures are high, and hence the costs of such trades are also high, they will exchange less of the disutility
of effort for the utility of freedom from pressure, etc

ibid

In English, this means the following:

  • Government offices are unlikely to be as productive as private sector offices
  • Surround yourself with folks who are go-getter types
  • And this is my take: figure out for yourself a good boss/manager/mentor who will push you, but in a non-zero sum way

This last part is all but impossible, but oh-so-important.

In any case: x-inefficiencies. An underrated topic from micro!

Notes from Does Management Matter? Evidence from India, by Bloom et al

  • Yesterday, I had linked to a paper by Bloom et al, and said that it would be a good place to start reading about productivity, particularly from an Indian point of view. Here are my notes from the paper:

  • As per Hsieh and Klenow the ratio of TFP in Indian and Chinese firms is 5(!) between the 90th and the 10th percentile
  • The quality of management, and therefore management practices, is one explanatory factor
  • Economists tend to not buy into this because they assume that profit maximization implies cost minimization
  • So in other words, if firms are not minimizing costs by adopting good management practices, it is because “wages are so low that repairing defects is cheap. Hence, their management practices are not bad, but the optimal response to low wages.”
  • In this paper, large multiplant textile firms were split into treatment and control groups. The treatment groups were given management consulting from a top consulting group, the control groups weren’t.
  • The result: “We estimate that within the first year productivity increased by 17%; based on these changes we impute that annual profitability increased by over $300,000. These better-managed firms also appeared to grow faster, with suggestive evidence that better management allowed them to delegate more and open more production plants in the three years following the start of the experiment. These firms also spread these management improvements from their treatment plants to other plants they owned, providing revealed preference evidence on their beneficial impact.”
  • So why wasn’t this being done already?
    • No need, because benchmarking was with local competition, who weren’t doing it anyway
    • Simple lack of awareness
    • A naïve belief that nothing would change by adopting these practices
  • But even within local competition, why did firms not exit?
    • Competitive pressures were heavily restricted
      • High import tariffs
      • No entry of firms by lack of external finance
      • Number of male family members
      • Lack of trust of professional managers (family owned businesses)
  • TFP in India is about 40% that of the USA, as per Caselli 2011
  • “Indian firms tend not to collect and analyze data systematically in their factories, they tend not to set and monitor clear targets for performance, and they do not explicitly link pay or promotion with performance. The scores for Brazil and China in the third panel, with an average of 2.67, are similar, suggesting that the management of Indian firms is broadly representative of large firms in emerging economies.”
  • The interventions comprised of improvements in:
    • Factory operations
    • Quality control
    • Inventory
    • Human Resource Management
    • Sales and order management
  • This was done by implementing the following steps:
    • A diagnostic phase
    • An implementation phase (this was for only the treatment group, obviously)
    • A measurement phase
  • The authors carefully consider whether the Hawthorne effect was at play, and reject the possibility.
  • ” In every firm in our sample, before the treatment, only members of the owning family had positions with any real decision-making power over finance, purchasing, operations, or employment. Non-family members were given only lower-level managerial positions with authority only over basic day-to-day activities. The principal reason seems to be that family members did not trust non-family members. For example, they were concerned if they let their plant managers procure yarn they may do so at inflated rates from friends and receive kickbacks.”
  • “A key reason for this inability to decentralize appears to be the weak rule of law in India. Even if directors found managers stealing, their ability to successfully prosecute them and recover the assets is likely minimal because of the inefficiency of Indian courts”
  • “Hence, the equilibrium appears to be that with Indian wage rates being extremely low, firms can survive with poor management practices. Because spans of control are constrained, productive firms are limited from expanding, so reallocation does not drive out badly run firms. Because entry is limited, new firms do not enter rapidly. The situation approximates a Melitz (2003)–style model with firms experiencing high decreasing returns to scale due to Lucas (1978) span of control constraints, high entry costs, and low initial productivity draws (because good management practices are not widespread).”
  • There are three reasons for inefficiency:
    • motivation problem
    • inspiration problem
    • perception problem
  • I need to read Lucas (1978) and Melitz (2003) next!

On Productivity

I really liked Patrick OShaugnessy’s reply to a question that Kunal Shah asked on Twitter recently:

It’s not just mediocre team members at a start-up, of course, it’s everywhere. As Gulzar Natarajan pointed out in a blogpost a while ago, it is also a problem with bureaucrats in government:

Are meetings organised most effectively – in terms of their periodicity, whether clear and brief agendas are communicated in advance, what gets discussed, and how the minutes are recorded? How are the meeting outcomes followed-up? How are failures to comply addressed?

http://gulzar05.blogspot.com/2021/01/management-productivity-improvements.html

The answer, by the way, is usually no, except for what gets discussed and are the minutes recorded. That part is done scrupulously, but the rest of it, not at all. Meetings are not periodic, clear and brief agendas are not sent beforehand, and worst of all, meeting outcomes are not followed up, and there is no clear understanding of what happens if failure to comply is observed.

In fact, I’d add one point to Gulzar Natarajan’s list, the meetings never end with a clear plan of action, who is responsible, and when and how a follow-up is to happen.

Here’s a point that people often miss out on they call a meeting: meetings are expensive. A meeting that lasts for an hour and involves ten people has cost the organization ten hours of work. The meeting had better have been worth the work that could have been done otherwise.*

In fact, the entire blogpost ought to be read by everybody involved in any kind of administrative set-up. Often, people in an organization have no clue about what the organizational objective is, whether work-allocation is effective or not (both in terms of the quantum of work that a person does, but also whether this person is truly equipped to do the work allocated to them), and how monitoring is done.

Human resource management is, quite simply, an alien concept.

The last paragraph from his post is worth pondering over:

While waiting for such a leader is not an institutional solution, it’s a pointer to prioritising the adoption of basic management practices. This is about the adoption of very simple and basic work, people, and situations management techniques, and not the sort of stuff one learns from management schools. Unfortunately, it’s not an area that receives any attention in conventional academic research and management consulting.

http://gulzar05.blogspot.com/2021/01/management-productivity-improvements.html

And if any student reading this is wondering where to get started in this regard, here’s a good place.

* Narrator: It never is

The Long, Slow, But Inevitable Death of the Classroom

If you read enough about Robert Solow, this quote coming up is but a matter of time:

You can see the computer age everywhere but in the productivity statistics

http://www.standupeconomist.com/pdf/misc/solow-computer-productivity.pdf

Much the same could be said about internet based learning technologies if you tried to measure it in colleges and universities before March 2020. We had lip service being paid to MOOC’s and all that, but if we’re being honest, that’s all it was: lip service.

Things have changed around a bit since then, I think.

We’ll get to that later on this post, but let’s go back to the seeing computers everywhere but in the productivity statistics bit for the moment. Paul David, an American economist, wrote a wonderful essay called “The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox“, back in 1990.

I think of this essay as an attempt to respond to the question Robert Solow had posed – why isn’t the data reflecting the ubiquitousness of the computer in the modern workplace? Read the essay: it’s a very short, very easy read.

Paul David draws an analogy between the move away from steam as a source of power, back at the end of the 19th century.

In 1900, contemporary observers well might have remarked that the electric dynamos were to be seen “everywhere but in the productivity statistics!”

David, P. A. (1990). The dynamo and the computer: an historical perspective on the modern productivity paradox. The American Economic Review80(2), 355-361.

Adjusting to a new technology, it turns out, takes time.

Steam-powered manufacturing had linked an entire production line to a single huge steam engine. As a result, factories were stacked on many floors around the central engine, with drive belts all running at the same speed. The flow of work around the factory was governed by the need to put certain machines close to the steam engine, rather than the logic of moving the product from one machine to the next. When electric dynamos were first introduced, the steam engine would be ripped out and the dynamo would replace it. Productivity barely improved.
Eventually, businesses figured out that factories could be completely redesigned on a single floor. Production lines were arranged to enable the smooth flow of materials around the factory. Most importantly, each worker could have his or her own little electric motor, starting it or stopping it at will. The improvements weren’t just architectural but social: Once the technology allowed workers to make more decisions, they needed more training and different contracts to encourage them to take responsibility.

https://slate.com/culture/2007/06/what-the-history-of-the-electric-dynamo-teaches-about-the-future-of-the-computer.html

Again, please read the whole thing, and also read this other article by Tim Harford from the BBC, “Why didn’t electricity immediately change manufacturing?” The article, by the way, is an offshoot of a wonderful podcast called “50 Things That Made The Modern Economy“. Please listen to it!

But here’s the part that stood out for me from that piece I excerpted from above:

“Eventually, businesses figured out that factories could be completely redesigned on a single floor. Production lines were arranged to enable the smooth flow of materials around the factory. Most importantly, each worker could have his or her own little electric motor, starting it or stopping it at will.”

https://slate.com/culture/2007/06/what-the-history-of-the-electric-dynamo-teaches-about-the-future-of-the-computer.html

Colleges and universities are today designed around the basic organizational unit of a classroom, with each classroom being “powered” by a professor.

Of the many, many things that the pandemic has done to the world, what it has done to learning is this:

each worker learner could have his or her own little electric motor personal classroom, starting it or stopping it at will.

In fact, I had a student tell me recently that she prefers to listen to classroom recordings later, at 2x, because she prefers listening at a faster pace. So it’s not just starting or stopping at will, it is also slowing down or speeding up at will.

Today, because of the pandemic, we are at an extreme end of the spectrum which describes how learning is delivered. Everybody sits at home, and listens to a lecture being delivered (at least in Indian universities, mostly synchronously).

When the pandemic ends, whenever that may be, do we swing back to the other end of the spectrum? Does everybody sit in a classroom once again, and listens to a lecture being delivered in person (and therefore synchronously)?

Or does society begin to ask if we could retain some parts of virtual classrooms? Should the semester than be, say, 60% asynchronous, with the remainder being doubt solving sessions in classroom? Or some other ratio that may work itself out over time? Should the basic organizational unit of the educational institute still be a classroom? Does an educational institute still require the same number of in person professors, still delivering the same number of lectures?

In other words, in the post-pandemic world…

How long before online learning starts to show up in the learning statistics?

Additional, related reading, for those interested:

  1. Timothy Taylor on why “some of the shift to telecommuting will stick
  2. An essay from the late, great Herbert Simon that I hadn’t read before called “The Steam Engine and the Computer
  3. The role of computer technology in restructuring schools” by Alan Collins, written in 1990(!)

Tech: Links for 10th September, 2019

Five tech products that I really like the sound of. The cost of this blog is two hours of Googling, but on balance? Worth it. Note: I haven’t used these products – this is neither a recommendation nor an endorsement. I just enjoyed learning more about them, and the problem they’re trying to solve.

  1. Airtable.
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  2. Zapier.
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  3. Notion.
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  4. Slack. I’ve been trying to get folks at Gokhale Institute to use Hangouts, but the struggle is real!
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  5. Todoist.

Etc: Links for 6th September, 2019

  1. Livemint with a rather fascinating list of companies that were operating in India before 1947.
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  2. “I obeyed. I opened one door and then another, and a pure white light emerged from the tiny bathroom. I entered, and looked up. The ceiling was an improbable 25 feet above me with a glass ceiling. Sunlight flooded the room. The sink was black marble. And in the middle of the otherwise whitewashed space was a simple, beige toilet. It was the most ridiculously and gloriously presented toilet I had ever seen. Imperial. It was an imperial toilet.”
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    If reading that doesn’t make you want to click on this, I admire your self-control.
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  3. A useful list.
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  4. Savor this one, at leisure. And keep YouTube handy.
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  5. “As you grow older, observing your surroundings, you realise that real people argue, debate and discuss. There are certain homes where the dining table conversations may be intellectual or mundane or even mockery of an emotional crisis another family member is going through but the point is that everyone does have a sound and cultivated thinking, a mind with opinions which are freely expressed. Their education, the books they’ve read and the places they’ve been to defines them, forms their ideologies, firms their faith and gives them a standpoint on a particular topic. I grew up in one such household. There was a room for disagreement amongst its members, yet each person was valued, irrespective. Relations didn’t break in a jiffy. There was no melodrama.”
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    Juhi Chaturvedi pays tribute to Hrishikesh Mukherjee. Lovely read!

Etc: Links for 5th July, 2019

  1. “…in the series, Valery Legasov (Jared Harris), a member of the Academy of Sciences, lives in nearly the same kind of squalor as a fireman in the Ukrainian town of Pripyat. In fact, Legasov would have lived in an entirely different kind of squalor than the fireman did.”
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    This is one of many, of course, but that line above was particularly illuminating. A review of the excellent series, Chernobyl.
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  2. “The productivity equation is a non-linear one, in other words. This accounts for why I am a bad correspondent and why I very rarely accept speaking engagements. If I organize my life in such a way that I get lots of long, consecutive, uninterrupted time-chunks, I can write novels. But as those chunks get separated and fragmented, my productivity as a novelist drops spectacularly. What replaces it? Instead of a novel that will be around for a long time, and that will, with luck, be read by many people, there is a bunch of e-mail messages that I have sent out to individual persons, and a few speeches given at various conferences.”
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    Neal Stephenson (whose books are excellent, and uniformly so) on productivity.
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  3. “Thanos, observing that there were too many people, decided to kill half of them. But this is curiously short-sighted for a man regarded by many as a policy prophet. Any exponential population growth process will soon replace the lost people: that is why exponential growth is such a headache in the first place. For example, if an economy’s resource footprint grows exponentially at a rate of 7 per cent, it doubles in just ten years — meaning that in less time than has elapsed since the first Iron Man movie, we could be back where we started.The only lasting solution is an economy that uses resources at a sustainable rate. Malthus’s qualms notwithstanding, contraception has been a very good start. The world population growth rate is steadily approaching a very sustainable-sounding zero.”
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    Tim Harford analyzes Thanos like only an economist can.
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  4. “Imagine you’re cooking a roast dinner for your family of four. You opt for beef with all the trimmings, safe in the knowledge that it’s a firm family favourite. But just as you’re about to serve up, your daughter announces she’s vegetarian, your partner texts to say they’re running late, and your son tells you he’s invited “a few” friends over for dinner too. Then, your dog runs off with the joint of beef while you’re desperately trying to work out how you are going to meet the needs of all these (quite frankly) very demanding and unruly individuals.”
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    The BBC on the problem of dynamic resource allocation. The excerpt, by the way, has nothing to do with the rest of the article.
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  5. “Because at the end of their pilgrimage, the weary are rewarded with two things: a footbath and a bowl of steaming noodles. The footbath is just a footbath, but the noodles are extraordinary. Su filindeu is—quasi-official designation here—the rarest pasta on the planet. The dish is made specifically for this occasion; its very existence revolves around this trek. So specialized and obscure and mind-bendingly intricate is it that only a few souls can make it. And only those who reach Lula will ever try it.”
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    The rarest pasta on earth. Why wouldn’t you want to read!

India: Links for 24th June, 2019

  1. “Was the earlier system, based largely on ASI (Annual Survey of Industries) for manufacturing (registered and unregistered), perfect? No, it wasn’t. Is the MCA-based system perfect? No, it isn’t. Despite problems with MCA, is the MCA-based system superior to the ASI-based one? The consensus (I didn’t use the word unanimity) among experts seems to be that it is.”
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    Bibek Debroy’s article discusses Arvind Subramanian’s paper. That excerpt above is probably the best way of thinking about it – and as I’ve said before and will say again: if thinking about GDP measurement doesn’t give you a headache, you aren’t doing it right. By the way, two of the twitter threads this past Saturday were about the same issue: worth reading, in my opinion.
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  2. “In manufacturing, the increase in informalisation is due to two reasons, according to a 2018 study by the Indian Council for Research on International Economic Relations: first, because of dispersal of production from larger to smaller units; and second, because of the creation of an informal workforce subject to fewer regulations, the fact that employing contract (or informal) workers reduces the bargaining power of the regular or formal worker, suppressing wages overall.”
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    Indiaspend reviews the state of employment in the country, and finds that there is far too much informalization – but also that this is increasing  over time. In this regard, the best book, by far, to read is Bhagwati and Panagariya’s “Tryst with Destiny”.
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  3. “Indian macro policy has been operating under an implicit 2-4-6-8 framework, which are the targets for the sustainable current account deficit, the desired level of retail inflation, the consolidated fiscal deficit target embedded in law and the aspirational rate of economic growth. There is a need to take a fresh look at this macro policy playbook for two reasons. First, the individual targets have been decided at different points of time by different parts of the economic policy ecosystem rather than emerging from a common analytical project. Two, there are reasons to doubt its internal coherence given that India has rarely been able to meet all four targets simultaneously over the past decade.”
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    The always excellent Niranjan Rajadhakshya comes up with a useful framework to keep a tab on India’s macro levers: 2-4-6-8 is a very useful mnemonic. The rest of the paper speaks about whether this framework makes sense!
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  4. “This crisis has systemic written all over it because the market can no longer distinguish financiers that are illiquid from those that are insolvent.”
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    I’m calling it: there’s a major crash just waiting to happen in the Indian equity (not just equity) markets, no matter what is done. Speaking of what is to be done, the five suggestions here make a lot of sense. Andy Mukherjee doing what he does best.
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  5. “India’s firm size distribution is excessively small, even compared to other developing countries. Also, complementarily, the number of really large firms are also excessively small. We have a “small is bad” problem. What is driving the small-ness? Is labour regulations responsible for discouraging businesses from “placing too many workers under one roof”? Is there anything else driving or contributing significantly to this trend?”
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    Bhagwati and Panagariya once again. Also, urbanization matters! Artificial dispersion of industries or people (same thing) tends to not work. Gulzar Natarajan on what needs to be done to increase productivity in India.