A Conversation with Shoumitro Chatterjee on Development Economics and International Trade
Shoumitro Chatterjee, an assistant professor of international economics at Johns Hopkins SAIS, was recently named one of India’s economic thinkers of the next decade. His research interests are at the intersection of development economics and international trade. One strand of his research focuses on trade and market power in agricultural supply chains; another strand on globalization, development, and structural change.
Chatterjee is also a research affiliate of the Center for Economic Policy Research and a non-resident fellow at the Center for Advanced Study of India at the University of Pennsylvania. Before joining SAIS, he was a faculty member at Pennsylvania State University and Georgetown University. He served as an economist in the Office of the Chief Economic Advisor of India during 2015-16.
Trade has historically played a crucial role in lifting millions out of extreme poverty. A key question now is whether this engine of growth will slow down, and if so, by how much. If international markets shrink, there’s also the risk that people who were lifted out of poverty could slip back, raising significant concerns about economic resilience and equity.
In this interview, Chatterjee discusses, among other issues, what drew him to development economics, insights from his study of agriculture and agricultural markets, and the pivotal role of international trade.
You were recently named one of India’s economic thinkers of the next decade. Can you share how you became interested in economics? What inspired you to focus on development economics and international trade?
I initially pursued economics somewhat by accident. My goal was to eventually pursue an MBA and build a successful career, so I chose economics for my undergraduate studies, thinking it would align with those aspirations. However, when I graduated in 2009, the global financial crisis had just occurred, and job opportunities were scarce in India. This unexpected situation pushed me toward pursuing a master’s degree, and that’s when my deeper engagement with economics began.
Three aspects of economics have fascinated me since my undergraduate days. First, it provides tools to break down complex problems into smaller, manageable parts, helping work toward effective solutions. Second, it highlights how changes in one part of the economy can lead to all sorts of unintended consequences due to the interconnectedness of markets—a concept known as general equilibrium. Third, it demonstrates how, in a complex world with numerous markets, prices can adjust to create the right incentives and balance supply and demand. In most cases, this ability of market forces to work more effectively than a planner to alleviate scarcity has always felt almost magical to me.
Growing up in India and witnessing the country’s trade liberalization firsthand, I developed a natural curiosity about economic growth, how nations achieve prosperity, and the role of policy in this process. As I said, my interest in spillover effects and unintended consequences of policy changes also aligns with these themes. The theory of international trade, with its focus on general equilibrium effects, provides a framework to study these phenomena. It was then natural to work at the intersection of development economics and international trade.
Can you elaborate on your work regarding globalization, development, and structural change? How do these areas interconnect in your research?
My research has two broad strands. First, I focus on studying agriculture, agricultural markets, and agricultural supply chains directly. Agriculture is a critical sector, particularly in developing economies, as millions of people are associated with it. However, meaningful improvements in the lives of those engaged in agriculture requires transitions out of it. This shift not only raises the incomes of individuals who leave agriculture but also benefits those who remain. This process, known as “structural change,” is fundamental to economic development.
The second strand of my research then investigates the forces that facilitate or hinder structural change. For example, globalization is a transformative force that can create new opportunities, enabling people to transition out of agriculture and into higher-productivity sectors. Additionally, I examine how demographic changes and population dynamics both influence and are influenced by the processes of growth and structural change.
What were some of the key insights or experiences you gained while serving as an economist in the Office of the Chief Economic Advisor of India?
Working in the Office of the Chief Economic Advisor (CEA) was, without question, the most intellectually stimulating experience I have ever had. One of the most important skills I developed was the ability to ask the right policy questions—those that truly matter to people and policymakers. I also learned how to distinguish the “big” questions, which address fundamental challenges, from the “small” ones that may be less impactful.
In addition to these analytical skills, I gained several valuable soft skills. Academic research, while thorough, can often be overly detailed and abstract. However, in the policy space, dense mathematical analysis isn’t always the most effective tool to persuade decision-makers. Arvind Subramanian, the then-CEA, who is also a mentor, a co-author and a former SAIS faculty member, taught me the power of visual storytelling. He emphasized the importance of crafting a single “killer” chart—one that captures the essence of a complex problem in a way that is both compelling and accessible. Such charts can be incredibly persuasive and effective in policymaking.
This combination of rigorous analysis and impactful communication has deeply influenced my approach to research and policy work.
Your research often intersects with agriculture and agricultural markets. What drew you to this particular area of study?
This focus on agriculture was, in many ways, a happy accident. While working in the CEA’s office, I noticed that few researchers wanted to delve deeply into agriculture, often finding the topic too dry or unappealing. I volunteered to take it up and, in the process, discovered a wealth of important and unanswered questions in the field. I also realized that the methods and tools I had learned in graduate school, particularly from international trade, could be applied to these agricultural issues, which sparked my initial interest.
Prof. Devesh Kapur (now also at SAIS) has been a long-time mentor and a major influence in my academic journey. While I was still in graduate school, we co-authored a paper titled “Six Puzzles in Indian Agriculture.” That paper later inspired two of my most prominent publications, where I sought to address some of those puzzles.
More importantly, Prof. Kapur encouraged me to work in areas that were underexplored, teaching me the advantages of being a first mover. Over countless hours of phone calls and walks, he pushed my thinking forward. He also generously made me a co-Principal Investigator on a significant research grant, which allowed us to conduct extensive fieldwork and study agricultural markets in India. That experience opened many doors, and from there, one thing naturally led to another.
How do you see the relationship between trade and market power in agricultural supply chains affecting developing countries like India?
Agricultural supply chains in developing countries like India are often underdeveloped. There is a lack of advanced storage technology, trade is managed by millions of small intermediaries, and there is limited investment by large companies in better seeds and inputs.
Large agricultural companies, however, require incentives or rents to invest in new technologies and supply chain improvements. This raises a critical question: Should developing countries establish institutions to facilitate the entry of large agricultural firms, as seen in many Western economies? The answer is not straightforward. While big firms can introduce technology and improve productivity, they can also reduce competition in the market. For instance, in the U.S., most farmers struggle to make profits, especially without government subsidies.
Understanding the balance between fostering competition and encouraging investment by larger firms is a crucial question—both from a policy and an academic perspective.
Given your extensive research on Indian agriculture and trade, what do you see as the most pressing challenges and opportunities in these sectors for India?
On trade: We are likely at the cusp of a paradigm shift in the global trade order, with many countries showing a tendency to raise tariffs and implement protectionist policies. Since the 1980s and 1990s, we have come to take the benefits of trade for granted—such as the variety of goods available and their incredibly low prices. However, this dynamic may change, and the path forward remains uncertain. Trade has historically played a crucial role in lifting millions out of extreme poverty. A key question now is whether this engine of growth will slow down, and if so, by how much. If international markets shrink, there’s also the risk that people who were lifted out of poverty could slip back, raising significant concerns about economic resilience and equity.
On agriculture: The biggest challenge—and opportunity—is finding pathways for people to move out of agriculture into more productive sectors. Many countries, including India and several in Africa, are struggling to move up the agricultural value chain, which limits growth potential. This is particularly striking given their proximity to Dubai, the global hub for agricultural trade. By leveraging this geographical advantage and investing in value-added agricultural products, there is significant scope to create economic opportunities and drive development. However, as researchers, we need to better understand why this transformation is not occurring.
Looking ahead, what are some of the key research questions you will be focusing on during the next few years?
I am quite interested in the ongoing demographic shifts and the population decline happening globally. A key focus of my research will be exploring how these demographic changes intersect with agriculture. For instance, I recently received the Johns Hopkins Catalyst Award for a project where I will study aging among farmers worldwide and its broader implications for agricultural productivity, labor markets, and food security.
Additionally, I am starting a new project that examines the role of urbanization—or the movement away from agriculture—in explaining the decline in fertility rates across the developing world. These questions are critical for understanding how demographic and structural changes shape economic development, and I look forward to contributing to this emerging body of research.
How has the challenge of climate change affected the ability of countries in the global south in particular to adapt with respect to their agricultural sectors?
If there is one sector most affected by climate change, it is agriculture. For countries in the global south, this challenge is compounded by their geographical location and the heavy reliance of their economies on agriculture, creating a double burden.
A significant part of the solution will need to come from science and technology. Advances such as drought-resistant seeds, improved water and flood management, and better climate prediction tools will be crucial in helping these countries adapt.
From an economic perspective, we are already witnessing the effects of climate change in the form of increased price variability and rising inflation, driven by more volatile agricultural yields.
International trade will play a pivotal role in mitigating the impacts of these shocks by enabling the flow of goods from surplus to deficit regions. This underscores the importance of maintaining and enhancing global trade systems, especially at a time when the world seems to be on the brink of potentially retreating from economic integration. Strengthening globalization could be a vital positive force in addressing these challenges.