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Development Economics Debraj Ray: Challenges and Opportunities for the Developing World



Debraj Ray[1] (born 3 September 1957) is an Indian-American economist, who is currently teaching and working at New York University. His research interests focus on development economics and game theory, and was the Co-editor of American Economic Review.


Ray has served on the editorial board of Econometrica, the Journal of Economic Theory, the Journal of Development Economics, the Journal of Economic Growth, the Japanese Economic Review, Games and Economic Behavior, American Economic Journal Microeconomics. He has served as a Foreign Editor of the Review of Economic Studies, and as Co-editor of the Econometric Society journal, Theoretical Economics.




Development Economics Debraj Ray



Debraj Ray is an Indian-American economist specialized in development economics and game theory. Ray is presently Julius Silver Professor in the Faculty of Arts and Science, and Professor of Economics at New York University. He is Co-Editor of the American Economic Review. Ray has held long-term positions at Stanford University, the Indian Statistical Institute, and at Boston University, where he was Director of the Institute for Economic Development. He has held visiting appointments at Harvard University, MIT, the Instituto Nacional de Matemática Pura e Aplicada (Rio de Janeiro), the People's University of China (Beijing) and the London School of Economics. He is a Research Affiliate of the Instituto de Análisis Económico (Barcelona). Debraj Ray is a Fellow of the Econometric Society, a Guggenheim Fellow, a recipient of the Mahalanobis Memorial Medal, and a recipient of the Outstanding Young Scientists Award (in the area of mathematics) from the Indian National Science Academy. He received the Dean's Award for Distinguished Teaching at Stanford and the Gittner Award for Teaching Excellence in Economics at Boston University. He is a Doctor Philosophiae Honoris Causa, University of Oslo.


In this review, we examine the links between economic development and social conflict. By economic development, we refer broadly to aggregate changes in per capita income and wealth or in the distribution of that wealth. By social conflict, we refer to within-country unrest, ranging from peaceful demonstrations, processions, and strikes to violent riots and civil war. We organize our review by critically examining three common perceptions: that conflict declines with ongoing economic growth; that conflict is principally organized along economic differences rather than similarities; and that conflict, most especially in developing countries, is driven by ethnic motives.


Debraj Ray is presently Julius Silver Professor of Economics and Director of Graduate Studies in Economics at New York University. He has held long-term positions at Stanford University, the Indian Statistical Institute, and at Boston University, where he was Director of the Institute for Economic Development. He has held visiting appointments at Harvard University, MIT, the Instituto Nacional de MatemÃtica Pura e Aplicada (Rio de Janeiro), the People's University of China (Beijing) and the London School of Economics. He is a Research Affiliate of the Instituto de AnÃlisis EconÃmico (Barcelona). Debraj Ray is a Fellow of the Econometric Society, a Guggenheim Fellow, a recipient of the Mahalanobis Memorial Medal, and a recipient of the Outstanding Young Scientists Award (in the area of mathematics) from the Indian National Science Academy. He received the Dean's Award for Distinguished Teaching at Stanford and the Gittner Award for Teaching Excellence in Economics at Boston University. He is a Doctor Philosophiae Honoris Causa, University of Oslo. Ray has served on the editorial board of Econometrica, the Journal of Economic Theory, the Journal of Development Economics, the Journal of Economic Growth, the Japanese Economic Review, Games and Economic Behavior, American Economic Journal Microeconomics, and is a Foreign Editor of the Review of Economic Studies. He is co-editor of the Econometric Society journal, Theoretical Economics.


Formal and Informal Institutions(a) Social networksNo policy happens in the void.... What role do informal institutions and norms play?i. Norms helped to sustain long distance trade among Maghribi traders: Greif (1993).ii. However, successful informal institution can be an obstacle to the development of formal institutions: Greif (1994).iii. Social norms as an obstacle to the demographic transition: Munshi (2000).(b) Formal Institutionsi. Institutions differ widely around the world: La Porta and Vishny (1998).ii. Good institutions are important for economic performance: aggregate approach: Acemoglu and Robinson (2001).iii. Historical approach: In India, colonial history continues to impact today's outcomes Banerjee and Iyer (2002), Iyer (2003).iv. The mechanics of why institutions matter. A poor institutional environment may makes business difficult. A study of contracting and reputation in the Indian Software industry: Banerjee and Duflo (2000).


One of the most important economists today that you probably have never heard of, Debraj Ray,* wrote a careful, amusing, and -- as one ought to expect -- very insightful response to Piketty's Capital. Ray matters in economics: he is the co-editor of the leading journal. Ray is one of the intellectual leaders of the new generation of 'theorists' that combine mathematical sophistication and data with a focus on policy relevance.* Ray is also an important figure in development economics, which he has helped move to the center of the discipline. You might think such sociology is irrelevant, but as Ray notes, Piketty's Capital has a self-presentation and narrative which is a form of "positioning" that appeals to his once-inside now purported outside-status in the profession. Part of Piketty's rhetoric is to rail against "simplistic mathematical models" (16; 574, and, especially, the autobiography on p. 31-2 culminating in an indictment against "petty mathematical problems.") This is not just a matter of mere positioning within economics; for, -- and Ray does not comment on this -- at crucial junctures, Piketty relies on a contrast between the esoteric mathematical models of the experts and democratic decision-making under conditions of transparency (e.g., 480, 513; recall also this post; Vallier also picks up on this [3E/3P] and will blog about in the future). But it is also a matter of positioning oneself as being the privileged expert with the public. Even if Ray's irritation were wholly self-interested, he has put his finger on on a non-trivial feature of Piketty's rhetorical strategy. (Don't get me wrong lots of economists become such privileged experts with worse strategies: i.e., they are bought by some interested party, or they get chosen by a politician who likes what s/he hears, etc.)


That Piketty's is, in part, a rhetorical strategy is clear from two facts: first, when it suits him he, too, relies on fairly simple mathematical models (often he is disarmingly upfront about this, e.g. 364). Second, he relies in non-trivial ways on existing economics. I had pointed to this in my second post on Piketty, but I am really an amateur and Ray's post adds a lot more detail, insight, and depth to what I had said. In particular, what becomes clear is that in some non-trivial respects Piketty is working with commitments that are found in the old economics work-horses (that is, the descendants of the "models of Harrod and Domar") and some so-called "dynamic efficiency" assumptions (see Ray's slightly more technical appendix here.) Piketty is a world-class economist, so this should not surprise. But as I pointed out before, it is unclear what constraints are driving his partial appropriation of existing economic theory.


** This move revisits an old debate in economics. Recall that I compared to Piketty to Kuznets/Friedman. Now, Kuznets/Friedman were following in the steps of Mitchell, who was criticized by Koopmans and defended by Vining in a celebrated debate recall this post.


I would like students to read and think about important topics in economic development. In order to get a sense of what the leading questions are and how the leading scholars structure their arguments, nothing (including my lectures) can substitute for reading original papers. Therefore, each topic contains list of suggested readings.


The theme of this course is to introduce a number of growth models and their empirical applications. Growth models shed light on the process of economic development. The objectives of the course are both to familiarize students with a number of well-known models and to examine their applicability.


This class is part of the Belgian Doctoral School in Economics, and is therefore also open to Phd students that would like to complement their training with an introduction to development research issues and approaches 2ff7e9595c


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