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The Green Revolution transformed agriculture in the Indian State of Punjab, with positive spillovers to the rest of India, but recently the state’s economy has fallen dramatically in rankings of per capita state output. Understanding the trajectory of Punjab’s economy has important lessons for all of India. Economic development is typically associated with changes in economic structure, but Punjab has remained relatively reliant on agriculture rather than shifting economic activity to manufacturing and services, where productivity growth might be greater.

The authors empirically examine structural change in the Punjab economy in the context of structural change and economic growth across the States of India. The authors calculate structural change indices and map their pattern over time. The authors estimate panel regressions and time-varying parameter regressions, as well as performing productivity change decompositions into within-sector and structural changes.

Panel regressions and time-varying-coefficient regressions suggest a significant positive influence of structural change on state-level growth. In addition, growth positively affected structural change across India’s states. The relative lack of structural change in Punjab’s economy is implicated in its relatively poor recent growth performance. Comparisons with a handful of other states reinforce this conclusion: Punjab’s lack of economic diversification is a plausible explanation for its lagging economic performance.

This paper performs a novel empirical analysis of structural change and growth, simultaneously using three different approaches: panel regressions, time-varying parameter regressions and productivity decompositions. To the best of the authors’ knowledge, it is the only paper we are aware of that combines these three approaches.

The purpose of this paper is to examine the impact of transaction costs on economic welfare and development, and the role of information technology (IT) in reducing transaction costs.

The paper extends the static model of Romer, in which transaction costs reduce welfare by reducing the equilibrium number of intermediate goods, and estimate the welfare losses in the case of domestic transaction costs. The main analysis of the paper extends a dynamic model of Ciccone and Matsuyama to incorporate transaction costs. Also described are case studies of the use of IT in rural India.

In the static model, it is shown that domestic transaction costs have a substantial welfare impact when the number of goods is endogenous. In the dynamic model, it is shown that high transaction costs reduce the long‐run level of development, and may arrest development completely in the extreme case. Some preliminary, qualitative evidence from rural India is offered to illustrate how these reductions may occur through the use of IT.

The treatment of transaction costs in a dynamic model is novel, and the use of such a model provides a new theoretical underpinning for understanding the potential impacts of IT on development.

This study attempts to recognize obstacles and barriers to financial inclusion in the agriculture sector, propose a framework based on the inter-contextual link between the barriers and understand the financial exclusion in the agriculture sector at the grassroots level. Previously published research articles were used to identify the barriers to financial inclusion, followed by informal interviews and collaborative discussions with the local farmers of the Sonipat district of Haryana and expert interviews using a structured questionnaire. TISM and MICMAC analysis are used to decern the nature of the relationship among the barriers discovered. The authors find that inadequate financial literacy, a shortage of financial awareness and the reluctance of various financial institutions are significant linkage barriers to strong driving and dependence power. High transaction costs and poor infrastructural support are the independent barriers. The paper identifies these new barriers to financial inclusion in the Indian agriculture sector and the framework depicting financial exclusion in India. This paper only gives a framework of barriers and does not quantify the effect of any relationship identified, but strongly emphasizes granting the Indian agriculture sector broad and simple financial access to advance and strengthen the nation's sustainable, inclusive economic growth.

This paper aims to examine the experience of ten Asian countries with respect to growth, trade and FDI. It seeks to explore relationships between the nature of exports and imports and growth, as well as the relevance of FDI as a channel for these relationships.

The paper opted for an empirical approach. It included collecting standardize data on international trade, GDP per capita, and FDI inflows. The trade data and GDP data were used in creating the productivity level for exports and imports for all of the relevant countries. The paper analyses how these productivity levels compare to GDP per capita, change over time, and relate to FDI inflows.

The authors find that FDI is positively correlated with higher productivity levels in exports and imports for many of the countries in their sample. The effect for imports is particularly apparent for imported intermediate goods, reflecting the emergence of greater trade fragmentation. In turn, both imported intermediates and exports that are associated with higher productivity levels are positively correlated with per capita GDP.

There are a couple of research limitations. First, the work does not determine causality; future econometric work should help to identify the causality mechanism. Second, trade fragmentation might lead to an overestimation of “productivity” levels; future work should try to identify the extent of the bias and a way to fix the issue.

This work may have implications for how policymakers view trade and FDI policies, and the possible links between them, in the context of promoting growth.

This work may have implications for understanding the links between growth and structural change in the economy, which is in turn linked to societal change.

This paper brings together empirical evidence that integrates discussions of FDI, trade fragmentation and improvements in the productivity of traded goods.

The chapter studies strategic default using an experimental approach.

The experiment considers a stochastic asset process and a loan with no down-payment. The treatments are two asset volatilities (high and low) and the absence and presence of social interactions via a direct effect on the subject's payoff.

I demonstrate that (i) people appear to follow the prediction of the strategic default model quite closely in the high asset volatility treatment, and that (ii) incorporating social interactions delays the strategic default beyond what is considered optimal.

The study tests adequately the strategic default using a novel experimental design and analyzes the neighbor's effect on that decision.

The purpose of the paper is to improve policy, and also to simplify theory and policy.

Theory is used in a simple and yet powerful way. Stylized facts are used. This paper reconsiders the prevailing macroeconomic policy regime, and proposes an alternative policy regime.

The low interest rate policy of the central bank in a recession is tantamount to imposition of tax on lenders’ interest income and a subsidy for borrowers implying an implicit tax-subsidy scheme. This scheme may be replaced by a different and explicit tax-subsidy scheme. This may also be supplemented by lower consumption taxes in a recession. From the viewpoint of stabilization of aggregate demand, the prevailing policy regime and the proposed policy regime can be equivalent. However, from the viewpoint of general macroeconomic and asset price stability, the proposed policy regime is superior, though it has (additional) cost of administration.

Macroeconomic and financial instability has large social cost. This paper can be useful in this context, as it has suggestions for improved macroeconomic policy. It also has policy implications for developing countries and highly indebted countries.

This paper’s innovation goes well beyond refinements to prevailing theories and policies. Also, it paves the way for further research.

The purpose of this paper is to gain a better understanding of the role of culture in general, and social distance in particular, in influencing the choice and efficiency of various contractual modes in developing country agriculture. It aims to focus on sharecropping, but the model of social distance can be applied to any contract, mainly those in close‐knit village societies.

Principal components analysis (PCA) is used in the study to develop a social distance index for all sharecroppers, which is included as an independent variable in land productivity ordinary least squares (OLS) regressions.

Findings indicate social distance is a key determinant in sharecropping efficiency for marginal tenant farmers in rural Nepal. Specifically, social distance is found to be a significant factor in explaining land productivity differentials between owned land and sharecropped land.

Future research hopes to see whether social distance is also a significant factor in the efficiency and choice of bonded labor contracts. It intends to use simple OLS regressions for sharecroppers and bonded laborers separately in which: input use and land productivity are separate dependent variables, and the various factors or proxies of social distance are independent variables to test for their particular impact; each type of contract is the dependent variable to see the extent to which social distance affects the choice of tenancy; and social distance is the dependent variable so one can see the specific impact of different proxies. Given the small sample (although representative), the strong results in this paper are limited.

From a policy standpoint, the results suggest that a relatively egalitarian agrarian structure, insofar as it results in lower social distances among parties to land and labor contracts, would have a positive impact on productivity. Therefore, the object of agrarian reforms should not be to alter or constrain the form of contracts (for example by banning sharecropping) but rather to improve the social relations among contracting parties.

This paper is original and provides value in three ways: a conceptually and theoretically innovative model that explains sharecropping efficiency independent of standard explanations of market imperfections, transaction costs, and risk; in developing a new measure of social distance that allows the data to determine the weights of the independent variables in constructing social distance; and to see the need to more importantly study the changing social relations on which contracts are based and are often only one element of.