Archive for November 23rd, 2010

What are the changes needed in teaching finance?

November 23, 2010

I just wrote an article in Mint on changes needed in teaching economics. I could not expand but the changes apply to finance classrooms as well. So just added one line that similar changes are needed in finance curriculum as well. Having studied finance before the crisis, I was always get surprised how little weight both teachers and students put on knowing and understanding economics. So you had pure finance teachers which only focused on financial sector related issues.

In this superb speech Jean Boivin, Deputy Governor of the Bank of Canada points to the deficiencies in finance teaching before the crisis. He was an economics professor at HEC Montréal, a business school.  So he links the issues really well:



A set of Fiscal Policy tools = 100 bps rate cut

November 23, 2010

Minneapolis Fed chief, Narayana Kocherlakota in this speech points to results of an interesting research done by his Fed economists.

He says given the eco situation, he would prefer to cut rates further. But with rates at zero bound, could there be other options? We know there are many unconventional/non traditional measures. But what about fiscal policy?

He says three changes in tax policy will help deliver a stimulus equal to 100 bps policy rate cut.


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