The Centre for Social and Economic Progress hosted Nobel Laureate in Economic Sciences, Michael Spence on Monday, February 12, 2024. The discussion was moderated by Montek Singh Ahluwalia, Distinguished Fellow, CSEP. Laveesh Bhandari, President and Senior Fellow, CSEP provided the welcome remarks while Rakesh Mohan, President Emeritus and Distinguished Fellow shared the closing remarks.

Speaker

Michael Spence, born in 1943 in Montclair, New Jersey, USA, A. Michael Spence is a distinguished economist known for his groundbreaking work in the field of asymmetric information in markets. In 2001, he was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his pioneering research.

The core of Michael Spence’s work revolves around the analysis of markets with asymmetric information, a concept that lies at the heart of economic theory. He developed the theory of “signaling,” a revolutionary idea that shed light on how individuals with superior knowledge in a market can effectively communicate their information to those with less insight. This innovative theory mitigates the challenges posed by adverse selection, a pervasive problem in various markets.

One of Spence’s most notable contributions has been his emphasis on education as a powerful signal in job markets. His research demonstrated how individuals could use their educational credentials to signal their productivity to potential employers. This insight has had far-reaching implications, both in academia and the job market, shaping how individuals pursue education and how employers evaluate potential candidates.

Moreover, Spence’s research continues to influence diverse fields, revealing how firms can employ strategies like dividend payments to signal their financial health and profitability to stock market agents. His work has opened new avenues of inquiry and understanding within economics, with its impact reverberating across sectors and industries.

Moderator

Montek Singh Ahluwalia, an economist, and civil servant, was former Deputy Chairman of Planning Commission, Government of India. He joined the Government in 1979 as Economic Adviser in the Ministry of Finance, after which he held a series of positions including Special Secretary to the Prime Minister; Commerce Secretary; Secretary in the Department of Economic Affairs; Finance Secretary in the Ministry of Finance; Member of the Planning Commission and Member of the Economic Advisory Council to the Prime Minister. In 2001, he was appointed as the first Director of the newly created Independent Evaluation Office of the International Monetary Fund. He resigned from that position in 2004 to take up the position of Deputy Chairman of the Planning Commission which he held from 2004 to 2014.

Ahluwalia has been a key figure in Indian economic policy. He writes on various aspects of development economics and has been published in prominent Indian and international journals and books. He co-authored Re-distribution with Growth: An Approach to Policy, which, published in 1975, was a path-breaking book on income distribution. In February 2020, he published his book, Backstage: The Story Behind India’s High Growth Years, an insider’s account of policymaking from 1985 to 2014.

For his outstanding contribution to economic policy and public service, he was conferred the prestigious ‘Padma Vibhushan’ in 2011, India’s 2^nd highest civilian award for exceptional and distinguished service.

Ahluwalia graduated from Delhi University and holds an MA and an MPhil in Economics from Oxford University. He is an Honorary Fellow of Magdalen College Oxford.

Welcome remarks

Laveesh Bhandari is President and a Senior Fellow at CSEP.  Dr. Bhandari has published widely on subjects related to sustainable livelihoods, industrial, economic, and social reforms in India, economic geography, and financial inclusion. He received his PhD in economics from Boston University for which he was awarded the Best Thesis in International Economics. He has taught economics at Boston University and IIT Delhi. Apart from applied economics research, Dr. Bhandari has built, seeded, and exited from three companies in the research, analytics, and digital domains, including Indicus Analytics, a leading economic research firm. Currently, he is conducting research on issues of inclusion, India’s energy transition, and how it will impact the government as well as the economy.

Closing Remarks

Rakesh Mohan is President Emeritus and Distinguished Fellow at CSEP.

Prior to this, he was President and Distinguished Fellow, CSEP from October 2020 till May 2023. Before this, Dr Mohan was Senior Fellow in the Jackson Institute for Global Affairs, Yale University and was also Professor in the Practice of International Economics and Finance at the School of Management at Yale University, 2010-12. He has also served as Distinguished Consulting Professor at Stanford University in 2009. Dr Mohan was also a Distinguished Fellow with Brookings India.

He has been closely associated with the Indian economic reforms process from the late 1980s. He was Executive Director on the Board of the International Monetary Fund, Deputy Governor of the Reserve Bank of India, Secretary, Economic Affairs, and Chief Economic Adviser of the Indian Ministry of Finance, and Economic Adviser in the Ministry of Industry. In October 2021, he was appointed to the Prime Minister’s Economic Advisory Council (EAC-PM).

All content reflects the individual views of the speakers. The Centre for Social and Economic Progress (CSEP) does not hold an institutional view on any subject.