1/ The India-vs.-Bangladesh GDP per capita comparison (post @IMFNews WEO) has sparked anxiety & acrimony

But wrong numbers being compared

NO, on more appropriate metric, India has not been surpassed and, according to IMF, unlikely to be in near future
2/ GDP per capita is an *estimate* for one *indicator* of the average standard of living/welfare in a country

Note the 2 caveats, it is only one indicator, there are many others (eg. human development index)

and even as that indicator, GDP can be measured in many ways
3/ We need to measure "real" GDP in local currency after taking out effects of inflation and

Then, convert all local currency estimates of real GDP into comparable dollars

Many ways of doing this (IMF has 3, World Bank has 4)
4/ All the focus has been on comparisons based on GDP measured at current, market exchange rates

This yields "conclusion" of Bangladesh eclipsing India

But market exchange rates not appropriate for welfare comparisons across time & countries because
5/ they may not adequately reflect domestic inflation and/or productivity growth

More appropriate basis is GDP at constant, purchasing power parity (PPP) exchange rates

This shows India ahead &, despite COVID's more adverse impact in 2020, likely to remain so
6/ BUT important caveats

IMF's historical numbers are themselves based on countries' local currency GDP estimates which are subject to uncertainty for both India and Bangladesh:

And IMF forecasts can also be off:
7/ And important policy lessons

India has no room for complacency

It was slowing pre-Covid: hks.harvard.edu/centers/cid/pu…

And Covid impact severe: for example, India will return to pre-covid *LEVEL* of real per capita GDP only in 2022, 3 lost years
8/ Finally

Bangladesh's performance over last 2 decades-on growth, manufacturing exports, & range of social indicators such as fertility, female labour participation, fin'l inclusion-has been remarkable

Bangladesh is a miracle-in-the-making offering development lessons for all

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Arvind Subramanian

Arvind Subramanian Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @arvindsubraman

15 Oct
1/n Second (& final) piece in @IndianExpress by @shoumitro_c & me where we evaluate the twin prescriptions of India’s inward turn: favouring domestic demand over exports (macro) and raising barriers to encourage domestic production (trade): indianexpress.com/article/opinio…
2/n We argue for more openness in areas of opportunity for India, eg. clothing. A key policy is reducing import tariffs on man-made yarn, a critical input to most dynamic export segment. Chart shows these tariffs for key competitors: India’s doubled recently & highest again Image
3/n our first piece in @IndianExpress where we document inward turn & discuss underlying rationale (“myths”) is here: indianexpress.com/article/opinio…
Read 5 tweets
14 Oct
Excited about first research outputs from @AshokaUniv Center for Economic Policy (ACEP) on India's Exports and Growth

Research paper: ashoka.edu.in/static/doc_upl…

Policy paper: ashoka.edu.in/static/doc_upl…

w/ @shoumitro_c

1/ ImageImage
Focus here is on policy paper.

India's inward turn ("atmanirbharta"):
-favoring domestic demand over exports (macro)
-imposing barriers favoring domestic production (trade)
...is consequential

3 questions

1. Is inward turn strong?
2. Is it warranted?
3. Will it work?

Our @IndianExpress piece today (another tomorrow) covers questions 1 and 2: indianexpress.com/article/opinio…

Is Inward turn strong?

Yes: on trade, tariffs up, standstill on trade agreements, and slew of incentives/subsidies for domestic manufacturing.

Read 14 tweets
1 Jun
Final *central* government revenue numbers for fiscal year 2019-20 for India released on Friday by Controller General of Accounts (CGA). Some confusion on their interpretation. Four take-aways 1/n
1. CGA numbers less reliable gauge of underlying economic activity because center's GST revenues are volatile, reflecting center's policy on sharing them with states. More reliable is a broader measure of *national* taxes: overall GST (center & states) plus all central taxes 2/n
2.Annual growth in this broad measure of taxes was minus 1.6% (nominal) and minus 6.1% (real). Excluding corporate taxes-which saw large rate cuts-growth was 3.2% (nominal) and minus 1.5% (real). *Real* tax growth is one macro-proxy for underlying *real* economic activity 3/n
Read 5 tweets
11 May
1/n My @ProSyn is about the complacency of elites in Europe, US and China and how the current crisis might undermine that. A short thread to explain: project-syndicate.org/commentary/cov…
2/n Europe: The sense that integration cannot be reversed is strong. But Europe is creating a permanent underclass of countries (in South, esp. Italy) that neither shares prosperity of North in good times and is abandoned in calamitous ones
3/n USA. Elites adamantly cling to American exceptionalism. But 4 successive shocks to leadership: imperial overreach (Iraq); rigged economic system (fin'l crisis); dysfunctional politics/polarization; & epic incompetence in covid crisis. Diminishing allure of American "model."
Read 5 tweets
21 Mar
Wanted: Committee to Save the World. Coronavirus pandemic requires a global response especially as threat spreads to poorer countries. But the Kissinger question haunts,"Whom should we call?" 1/n
US leadership has been tragically inadequate to its own crisis; Europe too focused on its own; China’s initial mistakes encumber its leadership role. And with these ruled out, so too are G-7, G-20 etc. 2/n
For obvious reasons--resources, expertise, reach--IMF, World Bank (& regional development banks) & WHO must take leadership where governments cannot; they must coordinate amongst themselves; and they must be guided by developing countries. 3/n
Read 12 tweets
11 Feb
Lead paper @rohlamba & me @AEAjournals symposium on India: pubs.aeaweb.org/doi/pdfplus/10…. “Constituting 1/7th of humanity, fissured horizontally by region, religion ..ossified vertically by caste & patriarchy, India is as much subcontinent of quasi-sovrgn states as unitary country” 1/n
A timeline of India’s major economic reforms and developments since 1980 2/n
Historically, 2 successful devpmt. patterns: USA/Europe: steady econ. growth (1.5%) over ~200 yrs. w/ eco. & pol. devpmt. co-evolving. East Asia: rapid growth (~5%) over ~50 yrs. w/ pol. devpmt. following eco. India different: democracy from start, then solid growth (~3%) 3/n
Read 13 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!