Archive for May 18th, 2011

Exploring Policy Trade-offs in Domestic and Global Economies

May 18, 2011

This is the title of my new paper. I have tried to look at how domestic policies could impact the global outcomes and vice-versa.  

The policymakers have been saying lately that rising inflation is not a domestic issue, but has become a global phenomenon. Hence, to tackle it we need global solutions as domestic solutions will not be enough. This issue is not limited to inflation alone but extends to other policy areas as well – fiscal, financial regulation, international monetary system and so on.

In this paper, we will discuss how the global environment has affected the local economies. It reviews how local policies should be responding to the problems whose sources are becoming global and whether global cooperation/coordination is needed. The paper will start discussing the issues of global coordination in economic policy in general and then look at a few fields of economics separately where these issues have come to light.

Comments/feedback are welcome.

Did US Banks learn any lessons from the 1998 crisis?

May 18, 2011

Bank officers are now saying we have learned some grave lessons from the 2007 crisis. We will try to never repeat the mistakes again etc. Should we believe them? Naah….Not one bit (some have forgotten lessons immediately)

In this amazing paper Rüdiger Fahlenbrach, Robert Prilmeier and Rene Stulz say nothing has changed. This time is the same as well.

They track banks performance in 1998 crisis (Russian debt crisis) when banks said the same things. They find banks which performed badly in 1998 have performed badly even now! The same story of banks having larger short-term finance and high leverage were the crisis banks then and are crisis banks now:


How UK Govt. is trying to improve policies using internet

May 18, 2011

A nice speech by George Osborne Chancellor of the Exchequer of UK. He points how UK was late to adopt internet as a tool for information dissemination and delivery of services. Now it is very serious and making changes to make internet a vital tool for public policy.

For politicians of my generation, the incredible disruptive impact of the internet is not a threat – it’s an opportunity. An opportunity to build societies that are more open, more innovative and more prosperous. As we all know, virtually every walk of life is being affected in some way by the internet and new technology.

That’s why, over the course of this conference, you are going to be hearing from experts talking about how the internet is changing the economy, affecting our culture and transforming society.  In my view, the impact that the internet is having on government is equally profound. That’s what I’d like to focus on today.

I’d like to look at three of the most dramatic ways that the internet age is changing government. The way it is:

  • Changing accountability.
  • Changing policy making.
  • And changing public services.

The speech is full on anecdotes and cases. In how internet could improve accountability he recalls a visit to India:


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