Archive for September 11th, 2010

Got a New Idea for Monetary Policy?

September 11, 2010

John Taylor has this very interesting post – Got a New Idea for Monetary Policy?

Do you have a new proposal for monetary policy? Perhaps a new policy rule? If so, it would be good to try out your idea first on a model of the economy. See how it works. Better yet, since economic models are different and economists frequently disagree, try it out in several models to be sure your rule is robust. But what models and how ?

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Macroprudential policies alone are not enough..lessons from Japan

September 11, 2010

This is a nice speech from Kiyohiko G. Nishimura, Deputy Governor of the Bank of Japan. First he compares the current recession with Japan’s in 1990s and shows the similarities. And then he says macroprudential policies alone are unlikely to help. It needs to be combined with monetary policy. He does not clarify how but my guess is he is suggesting to raise rates a little along with pushing macroprudential tools.

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Growth convergence among Indian States

September 11, 2010

Sanjay Kalra and Piyaporn Sodsriwiboonhave this interesting paper on growth performance of Indian states:

Convergence and spillovers across countries and within countries are old, but recurrent policy concerns, and India is no exception to this rule. This paper examines convergence and spillovers across Indian states using non-stationary panel data techniques. Results on convergence among Indian states are generally found to be similar, but more nuanced, than previous studies. Generally speaking, there is evidence of divergence over the entire sample period, convergence during sub-periods corresponding to structural breaks, and club convergence. There is strong evidence of club convergence among the high- and low-income states; the evidence for middle-income states is mixed. Dynamic spillover effects among states are small.

I don’t have time to get into details of the study. But state-wise differences and similarities are interesting.


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