Parantap Basu

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Beveridge, S. and CR. Nelson, 1981, A new approach to decomposition of economic time series into permanent and transitory components, Journal of Monetary Economics 7, 151-174. Bruno, M. and J. Sachs, 1985, Economics of worldwide stagflation (Harvard University Press, Cambridge, MA). Campbell, J. and N.G. Mankiw, 1987, Are output fluctuations transitory?,(More)
This paper introduces monopolistic competition and increasing returns to scale into a monetary real business cycle (RBC) model to re-estimate the welfare costs of in#ation. We "rst calibrate the model and show that it is capable of generating the observed aggregate #uctuations even when there are no shocks to the fundamentals. In particular, we demonstrate(More)
Empirical research documents that an exogenous rise in government purchases in a given country triggers a depreciation of its real exchange rate. This raises an important puzzle, as standard macro-theories predict an appreciation of the real exchange rate. We argue that this prediction might reflect the conventional assumption that government purchases are(More)
We construct a dynamic monopolistic model with heterogeneous firms to study the links between firms’ idiosyncratic income volatility, the degree of financial constraints that they face, and their export market participation decisions. Our model predicts that more volatile companies are more likely to fail, need to be more productive to stay in the market,(More)
Under efficient consumption risk sharing, as assumed in standard international business cycle models, a country’s aggregate consumption rises relative to foreign consumption, when the country’s real exchange rate depreciates. Yet, empirically, relative consumption and the real exchange rate are essentially uncorrelated. I show that this ‘consumption-real(More)
Welfare Implications of India’s Employment Guarantee Programme with a Wage Payment Delay* We examine the efficacy of a popular anti-poverty programme, namely the National Rural Employment Guarantee Act (NREGA) of the Government of India. We argue that a chronic friction of wage payment delay in this flagship programme could adversely affect the welfare of(More)
Growth-inequality relationship is reexamined in a neo-classical growth model with discrete occupational choice and incomplete markets for human capital. In our model a fiscal redistributive tax program directly impacts the steady state distribution of human capital by influencing the occupational choice of the agents. Growth and incomeinequality are(More)
Since human capital is a major driver of growth, the conventional wisdom suggests that the government should direct more resources to education. However, surprisingly the cross country data show little positive correlation between growth and public spending on education. In fact, the pattern is rather puzzling. Public spending on education tends to depress(More)