Archive for May 25th, 2011

India’s business cycle is getting similar to that of advanced economies

May 25, 2011

Chetan Ghate, Radhika Pandey, and Ila Patnaik  write this nice paper on the topic (HT Ajay Shah Blog). The paper has some amazing findings as suggested by the title itself.

The paper begins with a superb discussion of business cycles in emerging and developed. I am yet to see a paper write so clearly about such complex topic in plain english.

Basic idea is that business cycles of emerging/developing economies are more volatile. This leads to more volatile output, consumption, investment etc. As an economy develops, one should see lower volatility in all these dimensions. The paper finds similar thing happening for India.



Government’s role in promoting research

May 25, 2011

Superb speech by Chairman Bernanke (he is too good on topics like these, becomes  a Prof which is so natural to him).

For sustained growth one needs to promote research and innovation. Governments should help build environments which promote these innovations and help sustain growth.


The growing myopia in investments (or most of the things we do)

May 25, 2011

Andy Haldane again. He has made it a nice habit of giving papers which are amazingly insightful.

In this speech/paper, he along with Richard Davies discuss the effects of short-termism in investment decision-making.  Because of lack of time, am not able to discuss the paper in details. The summary is here as well.

Drawing on evidence across time and industrial sectors, they argue that short-term behaviour is significant among investors in capital markets and is rising over time.  They present some nice insights from history to present and conclude:


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