Big news right off the bat - World Bank Group President Jim Yong Kim announced the appointment of Prof. Kaushik Basu as the institution’s new Chief Economist and Senior Vice President on September 5, 2012
At this year’s Annual Meetings in Tokyo in October and the KCP Consultative Group Meeting in Copenhagen in late November, we will meet him in person.
Best wishes to Martin Ravallion
Acting Chief Economist and Senior Vice President of the World Bank, Martin Ravaliion is retiring as the Director of the Research Department, effective December 1, 2012. Martin has been an active member of KCP IMC since 2007. He will be taking up the Edmond D. Villani Chair of Economics at Georgetown University. He will also continue as an advisor to the President of the World Bank, Dr. Jim Yong Kim. For his main research interests and publication,
Aiming to determine if the projects have helped enhance the understanding of development policies and processes, the Program Administration Unit (PAU) of the KCP has launched the evaluation of KCP-funded research. The evaluation of completed research projects is in process now and will be completed before the Consultative Group meeting in Copenhagen in November 2012. For more information on the projects selected for the evaluation and the Terms of Reference for the evaluation, please visit the evaluation page on the KCP website.
FY12 In Review
In FY12, there are 30 projects that have been completed with some very good results. Detailed reports are available on the KCP website. Apart from contributions to the discussion development policy, there have also been major achievements with regard to data collection and the development of policy analysis tools. For example, one of the completed KCP projects developed ‘Export Transaction Database,’ that has already been cited by many researchers both internally and externally. More stories on the project findings and highlights are also covered in the FY12 Annual Report.
21 New KCP II Projects in FY12
42 proposals were submitted for the FY 12 KCP Call for Proposals.
The IMC meeting on May 15, 2012 reviewed the proposals and selected the best based on criteria that included innovation, capacity building and strategic importance. 21 projects were approved and awarded a total grant of $ 3,450,000.
The 21 new projects will study ways to improve global poverty monitoring, help develop new models to mitigate climate change, and promote productive investments, among others. For abstracts of awarded projects,
21 New Policy Research Working Paper Series
Even the Most Basic Form of Financial Intermediation May Be a Wasteful Use of Productive Resources
With the recent financial crisis resurfaced the concern that too many productive resources are being absorbed by the financial sector, and that the real sector is too vulnerable to “mistakes'”' in the financial sector. In a recent working paper, Maya Eden studies whether an unregulated financial system absorbs too many productive inputs in the context of a dynamic model with heterogeneous producers. In the absence of a financial system, the only way to purchase inputs is through the use of internal funds. Producers are subject to idiosyncratic productivity shocks, and will operate only if their productivity is high enough. Otherwise, they will hold money. A financial intermediation technology allows producers to purchase inputs in excess of their internal funds by borrowing from unproductive agents. However, intermediation requires the use of costly monitoring services. In equilibrium, intermediation increases the money in circulation and raises nominal prices, thereby reducing the value of internal funds and making producers increasingly reliant on costly monitoring services. For this reason, society is better off when intermediation is restricted.
For the full list of new research working papers