Shadow banking in China plays an important role in China’s overall financial system, but assessments of its impact vary widely. In this paper, Sarah Hsu describes how shadow banking is viewed by Chinese government officials and industry experts as overly risky and potentially undermining the formal financial system. But shadow banks are filling a gap in the provision of finance to particular sectors and smaller firms. Hsu analyzes the impact of government regulation on the shadow banking and non-shadow banking financial sector (i.e., the stock market) and proposes ways to strengthen the regulations of shadow banks to improve access to credit.

In “Revising India’s Economic Growth Transitions,” Deepankar Basu examines two questions relating to India's economic growth trajectory: structural breaks in growth and the impact of equipment investment on aggregate economic growth. He first shows that substantial accelerations in India’s growth path have occurred only at two points since the 1960s, in 1978-79 and 2004-05. Basu also finds that private investment in equipment and machinery exerts a significant positive impact on India’s GDP growth. These findings shed new light on how India transitioned from a slow to a fast overall growth trajectory starting in the 1990s.

This new book, co-edited by PERI researcher Shouvik Chakraborty, presents an overview of the state of the Indian economy immediately prior to the country’s April 11 national election. Professor Prabhat Patnaik writes that Quantum Leap in the Wrong Direction provides “a great service to the Indian people who are about to participate in what is undoubtedly the most decisive election in our recent history. To choose wisely the people need to be correctly informed about the state of the country. And information is precisely what is being denied to them…. Quantum Leap has sought to present a true picture of the performance of the Modi government.”

Sripad Motiram and Vamsi Vakulabharanam of PERI consider situations where individuals belonging to multiple groups inhabit a space that can be divided into smaller distinguishable units, a feature characterizing many cities in the world.  They conceptualize a phenomenon that they term "Grayness" - a combination of spatial integration based upon group-identity and income. Grayness is high when cities display a high degree of spatial co-existence in terms of both identity and income. They develop an index of Grayness, then apply this Grayness index to both the Indian city of Hyderabad and selected American cities.