Archive for November 8th, 2010

Time for an Economists Political Party?

November 8, 2010

Mike Moffatt is frustrated with state of politics and lack of economic knowledge in Canada’s politicians. He advocates the idea of Economists Political Party.

If he is frustrated with Canada’s policies, imagine the case for India. Any takers for implementing this idea in India? My first thought- Don’t even try it in India.

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A Return to Jekyll Island: The Origins, History, and Future of the Federal Reserve

November 8, 2010

Is the title of an exciting conference organised by Atlanta Fed.

It was a meeting at Jekyll Island in 1910 which led to creation of Fed in 1913. Here is some interesting history of formation of Fed:

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Maharashtra and Karnataka….a case of common corruption

November 8, 2010

Vivek Kulkarni throws light on corruption in Karnataka and Ashok Malik talks about governance issues in Maharashtra (HT: Ajay Shah’s Blog).

Both have many common threads. In both,  the capital cities are where most activity is centred. The capital cities lead to most of money-making but least is spent on improving lives in these cities. They are just cashcows. Then land/real estate is where much of corruption and kickbacks happen.

This bit on Karnataka is amusing:

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Ben Bernanke vs John Taylor …again

November 8, 2010

Though Krugman vs others dominates the economics debates, some others are as interesting.

John Taylor has been highly critical of Fed and overall government policy for creating this massive recession. He has said in numerous papers (see this) that Fed kept policy rates much lower in 2003-06 than what his Taylor rule predicted. Bernanke (and Kohn) gave a stirring speech saying Taylor rule does not work in real-time policy.  Taylor responded to this saying Fed’s forecasts of inflation were too low etc (read further for details)

Taking the debate further, Bernanke wrote an Op-ed defending Fed’s move to pass another round of quant easing (QE2).

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What do you mean by Teaser Rates?

November 8, 2010

In second quarter review of monetary policy (see this, this, and this as well), RBI took some measures to discourage teaser loans by Indian banks.   This blog has always expressed displeasure over banks offering teaser home loans (see this and this as well).

There was both displeasure and confusion regarding teaser loans. People did not know whether the norms will apply to new or earlier loans. Then some bankers said they did not know the meaning of teaser rates. Then others said why only banks and not other nbfcs and housing finance companies?

RBI officials clear the confusion in its teleconference with researchers/analysts. From the transcript (the conversation is not crystal clear though):

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