Archive for July 2nd, 2008

Primer on monetary and financial stability

July 2, 2008

I always like the way Reserve Bank of New Zealand writes its statements, speeches, articles etc. They just have too much clarity and are written with utmost simplicity.

I came across this note by by Leni Hunter on the relationship between monetary and financial stability. It is an excellent note on how central banks should manage both the goals in a consistent way.

Highly recommended.

PS. I also gave this issue a thought here

Mostly Economics is a member of Forbes network of Forbes Business and Finance Blogs

July 2, 2008

Mostly Economics Blog has gone from one place to the other. From being included in top rankings of economics blogs, it has now become a member of Forbes network of Business and Finance Blogs. I have added more details on this page.

Should India let more FDI in media?

July 2, 2008

Mint ( the business newspaper) is easily one of the most exciting things to look forward to every morning. It has a fantastic coverage of daily news, great edit pieces and above all – all is in a very easy readable format.

It recently put up this survey asking media barons whether they would like more FDI in their sector. Mint provides more light on the need for the survey:

The sharp limits on foreign direct investment (FDI) in Indian news media has always been a controversial issue. Back in 2002, India did relax its stringent laws to allow 100% FDI in non-news media but imposed a 26% cap on such investment in news ventures. Until now, it has been widely assumed that it is the Indian government that is unwilling to relax FDI norms in news businesses despite media owners wanting more foreign investors….’

But, on her last day as India’s information and broadcasting secretary, Asha Swarup told Mint ( that the government is not likely to raise the ceiling on FDI in news media because “there has been no real demand from the industry to raise the FDI cap in the sector”, adding: “We have all along said that we will be happy to take any step to facilitate the growth of the industry but the industry hasn’t demanded it.”

The survey had 12 major media barons. The results are:

6- in favour of FDI
4- not in favour
2- not known

Why I posted this development? Well, we often come across in most business newspapers commentaries from various people that India should open up its various sectors to foreign investment. You hardly come across articles which suggest otherwise. You might come across articles which say trade isn’t as beneficial but overall Milton Friedman wins hands down as far as views in newspapers are concerned.

So, it is always interesting to know how the media itself feels about opening up of its sector. Out of 12, 4 are not in favor. What I found more interesting was that out of those 4, one is a leading propounder of free markets/foreign investment  theory! I don’t remember reading one article in the paper which goes the other way for a long long time. Even if the media baron was giving his views, still it says a lot. I even found the reasoning absurd (atleast by its own standards).

Someone told me a while back, it is fashionable to talk about competition etc as long as it does not affect your own sector. I see it working somewhat in media as well.

Assorted Links

July 2, 2008

1. WSJ Blog points Paulson discusses currencies with Trichet. It also points Bill Poole will advise a mutual fund company

2. Mankiw points to a Larry Summers’ article

3. Fin Rounds points to a paper on investor sentiment and stock returns

4. Lusardi summarises her work on financial education

5. PSD Blog points to a solution to manage inflation – let currencies float

6. DB Blog points why foreign investors get a bad name?

%d bloggers like this: