Dr Reddy suggests new avenues for research

Bank of France organised a symposium on Globalisation, Inflation and Monetary Policy. It has got some of the best brains talking on an evergreen subject in monetary policy- the impact of globalisation on inflation (the summary is here). I would try and cover the speeches I have read in subsequent posts.

Dr. YV Reddy in his speech suggested few topics of research on the subject. Some I have shortened, some have been picked from his speech (in italics) 

1.  What has led to lower inflationary pressures- . globalisation of trade or globalisation of finance or both.

2. India and China, both have grown despite managed capital account and has also not led to adverse sentiments in financial markets. So should the research give more weight to macroeconomic fundamentals than capital account openness?

3. recent turbulence in financial markets/institutions and the importance of harmonised and coordinated response of public policies indicate the significance of countercyclical fiscal and monetary policies. Is it possible to argue that similar harmonisation between monetary policy and prudential policies would be of some value as part of counter cyclical measures?

4.  Regard to regulation and supervision over banks, it is useful to explore whether the special status of banks in the financial system and the need for active coordination among regulators / supervisors needs to be reaffirmed.

5. Shouldn’t regulation of financial markets be expanded as financial flows are becoming more global?

6. How should Central Bankers cooperate and coordinate in these times?

7. Finally, from a purely academic perspective, it may not be out of place to explore the issues concerning international policy coordination including the political economy considerations, in terms of interaction between governments and the financial sector, which may have been influenced by not only by the growing importance of finance but also the cross-border linkages in the financial flows.

All the seven are really good areas of research on this subject of globalisation and monetary policy. I will post on the topics as and when  if I come across some useful research on the same.


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