In the News: Devashish Mitra

Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs, says, "any tariff increase will come at a huge cost to India’s consumers as well as producers who use imported inputs."

"While good ideas to deal with them exist both within and outside the government, implementation is key. This is where the government often does not perform well," writes Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs.

"Tariffs on the imports of steel will make steel more expensive here, thereby raising the cost of production in steel-using industries and making them less profitable," says Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs. "These steel-using industries will then cut employment."

Why is free trade popular in the U.S, despite the success of many protectionist candidates in US politics? These syracuse professors explain that protectionist rhetoric is enjoyed by voters, who are ideologically committed to nationalist values such as protectionism, while still seventy eight percent of college graduates believe that free trade is an opportunity for economic growth. 

Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs, argues that "restrictive labor regulations have prevented India from reaping the full potential benefits of opening up the economy."

"If there is predatory dumping (along with injury to indigenous firms and local labour), there needs to be an anti-dumping tax (equal to the calculated dumping margin), which is similar to anti-dumping duties on internationally traded goods," says Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs.

Instead of raising tariffs India should have emulated China by reforming labor laws and maintaining a low-tariff regime on intermediate goods to attract export-oriented global manufacturing firms, according to Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs.

Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs, argues that trade has been beneficial to developing countries in Asia, with competition leading to higher productivity, lower price-cost markups and lower poverty.

"There is a mechanism that will distribute gains from trade in a more inclusive way," said Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs, "that, over time, will build the support for globalization."

"If the government is serious about exports and jobs, a bolder approach needs to be taken on labor reforms," says Devashish Mitra, professor of economics and the Gerald B. and Daphna Cramer Professor of Global Affairs, about the Indian government.

"The solution to our jobs problem is not trade protection but social protection and subsidised higher education," writes Devashish Mitra, professor of economics.

The best case scenario for the long-term effects of demonetisation, therefore, is that there is no effect at all," writes Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs.

A research paper by Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs, found that “temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry.”

According to Devashish Mitra, professor of economics & Gerald B. and Daphna Cramer Professor of Global Affairs, "to fully employ the growing labour force gainfully and productively, India will probably have to create tens of millions of modern-sector jobs over the next few years."

"In terms of effectiveness, the move undoubtedly prevents further circulation of existing counterfeit currency in the two demonetised denominations (Rs 500 and Rs 1,000)," writes Devashish Mitra, professor of economics, and his co-author.