The International Development and Trade Research Group (IDTRG) , RMIT University Melbourne, Australia and Amrita Centre for Economics and Governance (ACEG), Amrita Vishwa Vidyapeetham, Clappana, Kerala, India
The following projects are proposed by members of the International Development and Trade Research Group (IDTRG) for collaborative work with Amrita Vishwa Vidyapeetham’s Centre for Economic Fragility and Governance (CEFG). These projects are in the initial stages of development and should be developed further in collaboration with members of CEFG. The projects are applied in nature and each should lead to at least one academic publication as well as a research grant application. The lead IDTRG researcher is identified for each project although it is envisaged that others from the research group will be involved in each project. Members of the IDTRG will rely on Amrita to identify the most appropriate CEFG researchers. Short biographies of the IDTRG researchers are provided in the appendix.
Project Title: How Communities Cope with Climate Change: Findings from India
Lead RMIT University Researcher: Alberto Posso
India is a mega-biodiversity centre with two of the world's 18 ‘biodiversity hotspots’ located in the Western Ghats and in the Eastern Himalayas. Anthropogenic climate change caused by increasing human population, consumption, and resources usage is becoming an important source of shocks to people that rely on the environment for their livelihoods. The rise in frequency of floods, droughts and extreme weather in the Indian subcontinent in recent years is testament to the severity of this problem. These shocks are relatively more severe for poor and vulnerable households, which directly depend on agriculture, biodiversity and the environment for food, income and shelter.
The proposed research aims to look at variations in temperatures and other climatic shocks using GIS secondary data and analysing households’ coping mechanisms and sources of vulnerability. The research will also consider gendered and cultural characteristics that determine the success and failure of various coping strategies. Given that environmental shocks potentially disrupt labour supply and infrastructure, the research team will also discuss the importance of these shocks to the wider economy with particular emphasis on international trade. Overall, the project will highlight effective responses to various environmental shocks in each region. The research will take place in villages that have been adopted by Amrita Vishwa Vidyapeetham as part of their live-in-labs programs. This will provide readily available and diverse source of information across India.
The research team will provide practical and achievable evidence-based policy advice immersed within existing institutional and cultural structures. This is a new way of formulating economic policy, where grass-roots based policies that build on communal and local strengths, rather than imposing alien institutional frameworks, are recommended in order to provide higher levels of effectiveness.
Project Title: Explaining Inequality in India
Lead RMIT University Researcher: Ahmed Skali
Since the publication of Thomas Piketty's Capital in the Twenty-First Century in 2013, the issue of income inequality has again come to the fore around the world, both in industrialized and developing countries. The detrimental effects of high inequality are well-known. It slows down economic development, weakens political institutions, and can also trigger violence. While policy experts have a good understanding of inequality dynamics at the national level, what is less well known is how inequality shapes our societies at the local level. The proposed research hopes to fill this gap, which is of particular relevance in the Indian context, where both poverty and inequality are pressing issues.
Local-level inequality is an understudied topic. In order to obtain reliable measures of inequality at the local level, reliable GDP accounts at the regional level are necessary. Developing countries, however, lack the financial resources and statistical capacity to collect accurate, frequent income data for rural citizens, restricting all policy discussions to a very cursory level. Reliable local-level inequality data will allow us to investigate the relationship between inequality and local development, but also whether inequality triggers violence, especially during economic crises. Other potential studies could examine location decisions by skilled workers, or seek to identify which local political institutions areas are most at risk of weakening.
Project Title: What Has Caused The Sudden Deflation In India?
Lead RMIT University Researcher: George Tawadros
Since the start of the 21st century, inflation in India has mirrored its relative macroeconomic stability. For instance, between 2000 and 2006, the CPI averaged just 4 per cent during a period where growth and investment began a secular acceleration and external imbalances narrowed rapidly. However, that relative stability in the CPI began to change in 2006, when it rose dramatically by an average of more than 9 per cent between 2006 and 2013. The stickiness of inflation coincided with greater global economic pessimism: the post-Lehman growth rebound was temporary, external imbalances began to widen as households flocked to physical assets and gold, and the Indian rupiah came under sustained depreciation pressures, with things coming to a head when the Federal Reserve tapered one of its Quantitative Easing programs in 2013.
However, as rigid as the CPI was between 2006 and 2013, its fall has been just as dramatic. After peaking at 12.1 per cent in November of 2013, the CPI collapsed to 4.3 per cent in December 2014, a fall of almost 8 per cent in only 13 months, before increasing to 5 per cent in October, 2015. This dramatic decline in the CPI has led to two important and related questions. First, what was responsible for the sharp decline over the last two years? And second is this decline in the CPI sustainable, or is it transitory?
Answers to these questions are not trivial, given the global and domestic events during this period. The disinflation over the last two years has occurred when global oil and commodity prices have collapsed, food prices have fallen sharply, the implementation of a new monetary policy regime by the Reserve Bank of India to anchor inflation expectations, a new Government working on alleviating food supply bottlenecks, and the continued restraint on agricultural support prices. So how does one ascertain the extent to which different factors contributed to this disinflation? The purpose of this study will be to analyse this dramatic decline in inflation, and quantify the contribution of the different factors in explaining the recent reduction in inflation that has occurred in India, using an augmented Phillips curve. The CPI (and inflation) will also be disaggregated by State and rural/urban location to examine the importance of inflation to those living in poverty and potential impacts that changes in inflation can have on their lives.
Project Title: Impacts of Ethnic Diversity in India
Lead RMIT University Researcher: Sefa Awaworyi-Churchill
Relying on national and cross-country level data, the existing literature has thus far explored a myriad of plausible mechanisms through which ethnolinguistic diversity works to impair the attainment of optimal social and economic outcomes. This strand of literature is said to present what is now known as the diversity-deficit hypothesis. The diversity-deficit hypothesis is so well-grounded empirically that as Gisselquist, Leiderer, and Niño-Zarazúa (2016) puts it, asking whether diversity has negative implications for socioeconomic outcomes in today’s literature appears irrelevant. Instead, understanding why these relationships exists, i.e. the factors that underlie diversity’s harmful effects on social outcomes seem to be a more optimal direction for future research.
However, in a survey of the literature, it is evident that when micro data is employed, the evidence generally contrasts the conventional wisdom of diversity-deficit/debit. Thus, despite the wide-spread evidence of a negative effective of ethnic diversity using cross-country aggregate data, micro level evidence tends to support the diversity-dividend hypothesis (i.e., a positive effect). For example, using highly disaggregated community-level data from the developing world, Gerring, Thacker, Huang, and Lu (2011) find that ethnic and religious fractionalization is often associated with desirable socioeconomic outcomes. Similar evidence is presented by Gisselquist et al. (2016) using district-level data for Zambia. They show that ethnic fractionalization has a positive relationship with some key welfare outcomes. Hopkins (2011) also finds mixed effects of diversity on social spending in U.S cities. These findings have ignited the academic discourse on re-examining the diversity-debit hypothesis, with renewed emphasis on micro level evidence.
Accordingly, the aim of this project is to examine the effects of ethnic diversity on a wide range of social and economic outcome variables using micro level data from India. Outcomes of interest include income, poverty, health, inequality, educational attainment, subjective wellbeing, and social capital among others.
Simon Feeny has a PhD and almost 20 years’ experience as a development economist. He is presently a Professor in Development Economics at RMIT University and leader of the International Development and Trade Research Group. Dr Feeny has published over 70 books, book chapters and journal articles on development economics in a wide range of fields including: foreign aid allocation and effectiveness, the MDGs in Asia and the Pacific, public sector economics, poverty and human well-being, the impact of the global financial crisis and household vulnerability and resilience to economic shocks. He has undertaken a number of research-based consultancies for organisations including the Department of Foreign Affairs and Trade, the United Nations, the South Pacific Forum Secretariat, the ASEAN Secretariat, Oxfam Australia, World Vision International, and the Fred Hollows Foundation.
Sefa Awaworyi-Churchill is an applied and development economist with a PhD in economics. He conducts meta-analyses and empirical research in development economics, labour economics, microfinance and other issues at the intersection of sociology and economics. His current research focuses on understanding the impact of ethnic fractionalisation and other social forces such as trust and social network on outcomes such as firm performance, inequality and poverty. He has published in some of the leading economics and interdisciplinary journals such as World Development, Small Business Economics, Social Indicators Research, Economic Record and Empirical Economics, among others. He is presently a Vice Chancellor’s Fellow at RMIT University and a member of the International Development and Trade Research Group.
Meg Elkins is a Lecturer in Economics at RMIT University. She completed her PhD in Economics at La Trobe University in 2014. She is an applied economist with a focus on poverty reduction, well-being, social protection and cultural economics. She has published in high quality research journals. Meg’s research methods include microeconomic analysis to evaluate programs and policies. During her PhD she evaluated poverty reduction and well-being outcomes for developing countries undertaking the World Bank’s Poverty Reduction Strategy Papers. She has research grants for the City of Melbourne ($28,000) and HERDSA. Meg is a member of DSA/EADI’s multidimensional poverty group with presentations at the University of Oxford, University of York and Bonn, Germany.
Imad Moosa is a Professor of Finance at RMIT University. Until 1991, Imad had worked as a financial analyst, financial journalist and a professional economist/investment banker. As a result, he gained practical experience in foreign exchange, money market operations, new issues, securities portfolios and corporate finance. He was also an economist at the Financial Institutions Division of the Bureau of Statistics at the International Monetary Fund (Washington, DC). Imad has served in a number of advisory positions with private and public institutions, including KPMG, AUSAID, US Treasury, Central Bank of Kuwait and the Gulf Monetary Council. He has published 19 books and some 250 papers in academic journals spanning several fields including international finance, financial markets, macroeconomics, energy economics, applied econometrics and the history of economic thought.
Alberto Posso is an Associate Professor of Economics at the International Trade and Development Research Group in the Royal Melbourne Institute of Technology (RMIT), where he has been employed since 2009. Alberto holds a PhD in Economics from the Australian National University (ANU) with specializations in labor economics, economic development, and applied econometrics. His work aims at generating evidence based policy advice to developing countries at both the national and community level. Geographically, his area of specialization covers Asia, Latin America and the Pacific. Alberto has 35 peer-reviewed publications and a growing international reputation as evidenced by addresses at APEC meetings, adjunct appointments at the Australian APEC Study Centre and universities in Ecuador and Vietnam, as well as a series of invitations to present his work in reputable academic, government and international institutions.
Ahmed Skali is a Lecturer (Assistant Professor) of Economics at RMIT University. He specializes in comparative economic development, political economy, and policy evaluation and is currently working on a number of research projects in these areas. After receiving a PhD in economics from Monash University, Dr Skali spent a year as a postdoctoral researcher at Swinburne University of Technology in Melbourne. There, he gained experience working on policy-relevant projects and engaging with experts from both the academic and policy spheres. Dr Skali has been involved in research consultancies for the Australian Government’s Department of Industry, Innovation and Science, the Victorian State Government’s Department of Health and Social Services, and the Victorian State Government’s Department of Premier and Cabinet.
George Tawadros is an Associate Professor and an active researcher in the area of Macroeconomics, Monetary Economics, International Finance, and International Trade. He has taken a leading role in a number of research projects, where he has secured funding for his research projects. George has been the chief investigator on three industry-based, nationally competitive grants. In 2009, George spent some time at the Federal Reserve Bank of Cleveland, accepting a visiting scholar position in the Office of Policy Analysis, and the Research Department (International Markets). He also spent some time at Case Western Reserve University, and John Carroll University, where he taught in their respective Masters programs.