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Prof K. Krishnamurty, fondly known as ‘KK’, an eminent and first generation macroeconomist, passed away at his residence in Hyderabad on Wednesday morning. He was 76 years old.
The former Director of the Institute of Economic Growth, Delhi, made a significant contribution to Indian macroeconomics. His early work on “Inflation and Growth: A Model for India” in 1984 is a basic reference even today for any macro modelling exercise and relevant to understanding the current issue of growth-inflation trade-off.
In the early 1990s, along with Prof V.N. Pandit of Delhi School of Economics, Prof Krishnamurty pioneered a large macro model for India, under Global Project LINK supported by UN-DESA, which was later popularly known as IEG-DSE model. This was the only model with a large number of variables with had more than 200 equations describing their inter-relationships.
The forecasts that are derived from this model – which recognised the role of infrastructure in overall growth very early on - has been extensively used in the policy making process. Other contemporary issues such as thresholds in fiscal expansion and inflation, crowding-in and crowding-out were also in-built in the model.
Even after his retirement from IEG, Prof Krishnamurty continued to keep abreast of developments in the Indian economy. The long discussions we had with him before finalising the forecasts were always enlightening. The last such discussion that I had with him was less than a week ago when he drew my attention to a piece on the risks of achieving 12th Plan growth targets that appeared in a business daily.
A graduate from Andhra University, Professor Krishnamurty obtained his Doctorate from the University of Pennsylvania under the guidance of Nobel Laureate Prof L.R. Klein, from whom he picked up his meticulous data reading skills.
Before estimations, Prof Krishnamurty used to look at the data and graphs for a long time and try and figure out factors behind each and every turning points of the series. He always sat with his research team and thought aloud about data, economic theory and modelling issues. This has benefited a lot of young researchers who worked with him.
In his passing, the Indian macroeconomics profession has lost one of its pioneers.
(The author is with the NIPFP)
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