Archive for January 18th, 2010

A public debt target for India?

January 18, 2010

Petia Topalova and Dan Nyberg in a new paper write:

This paper discusses possible medium-term public debt targets for India, based on evidence from the economic literature on prudent levels of public debt and the feasibility for the country to meet a particular target over the next 5-6 years. While recognizing the challenges in determining an appropriate debt target, cross-country analysis and simulations suggest that a debt ratio in the range of 60-65 percent of GDP by 2015/16 might be suitable for India. Such a debt ceiling, while still above the average debt level for emerging markets, is within the range of debt ratios that would provide room for countercyclical fiscal policy and contingent liabilities. It would also send a strong signal of the government’s commitment to fiscal consolidation by making a clear break with the past.

Currently it is at around 78% of GDP and is high in the emerging market space. It has also made the least progress in reducing its debt despite great growth.


RBI starts scholarship scheme for faculty members from Indian academic institutions

January 18, 2010

RBI has started a program to provide scholarship scheme for faculty members from Indian academic institutes.

Applications are invited by the Reserve Bank of India for Scholarship Scheme for Faculty Members from Academic Institutions. The scholarship scheme for faculty members aims at bringing on board scholars, who would be able to undertake and pursue critical projects successfully and thereby contribute to the Bank’s research universe. The Reserve Bank of India invites full time faculty members teaching economics or finance in any UGC-recognised institution in India to undertake short term research in the areas of monetary and financial economics, banking, real sector issues and other areas of interest to the Bank.

The objectives are:

  • To increase awareness about the activities of  the Bank amongst faculty members and student community, and
  • To provide exposure to faculty members teaching economics and/or finance in different areas/activities in the Bank.
  • I think it is an excellent initiative to help build monetary economic research in the country. The academics could use RBI as a base to build on their research and RBI could use research findings for their policy purposes. I am hopeful I can learn more about Indian monetary economics from this initiative.

    Microfinance: Translating Research into Practice

    January 18, 2010

    I had written a while ago on the new controversy in microfinance research. Recent research shows that microfinance has not really helped individuals where it is most expected.

    For three decades, microfinance institutions have given out small loans to the world’s poor — mostly women — and amassed hundreds if not thousands of case studies showing that the loans help alleviate poverty, improve health, increase education and promote women’s empowerment. Skeptics, however, have argued there is not enough hard data to prove that microfinance transforms lives on a large scale, and they have called for more rigorous analysis.

    Now two new studies have raised doubts about long-held beliefs in microfinance. The studies — which used randomized controlled trial methodologies — did find that microloans helped poor entrepreneurs boost profits in their businesses. However, the studies found little impact on health, education, average consumption, women’s decision making or self-reported well being.


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