RBI’s monetary policy coming up on 24-Jan-12.
Here is a research report on the background under which the policy decisions are likely to be taken. It includes expectations as well..
In each policy, RBI has some interesting decisions to make. This one is no better…
Comments/expectations welcome.
Gokarn’s speech referred in this report is here
As per this KC Chakrabarty speech the origination comes from a Greek word Krisis :-)
This is a super speech from Adam Posen of BoE.
Some background first. Economic Historians/Historians have pointed how the recent globalization phase is similar to the one seen in 1870-1910. The previous one was interrupted by world wars and in the middle due to Great Depression. After that we had these tight controls which began to be relaxed around 1970s and again a new wave of globalization emerged. The players changed. As in previous, UK was the supplier of funds and US was the receiver (Adam Posen disputes this in this recent speech). This time China (and other middle ease etc) are the suppliers and US the receiver. US should have been the supplier of funds this time as it is the leading economy as UK was then. However, as highlighted by Lucas in 1990s capital flows have not flown to developing but developed economies. Subsequent research shows even amidst developing economies, it goes to economies which are better off.
So just as this recession was taking place, some said perhaps globalization will at best not increase as much as countries become more protective.
Posen curiously titles the speech as - What the return of 19th century economics means for 21st century geopolitics? According to him, we are likely to see the trends of 19th century globalization now. As emerging economies have gained immensely from globalization barring some issues here and there, they are unlikely to undo glob.
He covers following themes:
I came across this really interesting paper on the topic. It is by Laura Seay (Prof of Pol Sci) of Morehouse College.
She points to this interesting section of Dodd Frank Act(section 1502) which aims to increase transparency in financial reporting of all companies engaging in conflict regions of Africa. The idea is to ensure American firms (and its suppliers) are not engaging in illegal activities and sourcing precious minerals (apart from diamonds etc…recall Blood Diamond) from these conflict regions. The law hopes this will lead to improvement in overall financial activity in these regions and indirectly lead to better governance in these countries.
However Laura disagrees with this provision in the DFA. She says instead of improving conditions in Congo, it has already worsened them. And so far there has been no final law on this as SEC is still working on the provisions. Even before a final word, it has put a ban on exports from Congo and almost 2 million Congolese mine workers are jobless.
