Showing papers by "Chetan Ghate published in 2007"

Comment on `Amitava Bose: A Discussion on Continuous Time Growth Models'

Abstract: This comment on Bose's note suggests that a possible approach could be to retain the continuous time framework and think about the tension between the Inada condition and the essentiality of capital. Whether there is take-off or no accumulation (forever) depends on what "force" gets the upper hand at k=0.On the one hand, no capital can be accumulated since capital is essential. On the other hand, at k=0, the marginal product of capital is infinity. Therefore, even a zero amount of capital can lead to positive output and to accumulation. Which of these forces dominates is unpredictable. Either the essentiality of capital dominates. This produces the trivial solution (k=0). Or the Inada condition dominates and this triggers an instantaneous take off.

The political economy of infrastructure investment in India

Abstract: We construct a simple political economy model with imperfect capital markets to explain infrastructure investments across Indian states The model predicts that: i) the fixed cost of accessing the modern sector, ii) the initial stock of infrastructure, iii) median voter wealth, and iv) corruption, can all potentially explain why different states have different level of infrastructure investments The theoretical model is motivated by recent empirical work on India that argues that there as on why per capita income across Indian states have diverged is because of the distribution of infrastructure investments The model suggests that reducing leakages in funds earmarked for infrastructure and reducing the ?xed costs of accessing the modern sector - beyond their other well known effects - are policy complements Together, they can incentivize politicians to spend more on infrastructure