India as a monetary union…how does it work?

Well, this thought never really came to mind till the European crisis. There are many comparisons between how EU is not an optimal monetary union (as in lacks the main features of a mon union – labor mobility, fiscal union etc) and how US is closer to the optimal mon union. (see this and this for some recent discussion). Canadian Blog pointed to some comparisons between CMU and EMU as well

But what about India? How does India fare as a monetary union? Barring some posts by Gulzar there is hardly any mention of bringing this monetary union debate in India’s context.

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Website on Mid-day meal scheme

Kapil Sibal launched a website y’day on mid-day meal scheme in schools.

The site provides detailed guidelines about the scheme; the Programme Approval Board approvals for various states/UTs as well as the physical and financial progress under the scheme. In addition,  a brochure and a booklet was being launched to bring out the key highlights about the scheme.  The site also brings out the innovative practices adopted by the various states.  It also provides details about the key officers responsible for the scheme and their contact details.   

The site has some interesting case studies.

Should be a useful source for students doing research on this evergreen topic..Please do share your findings..

Francis Fukuyama on the Financial Crisis – a waster opportunity to reform..

People need to keep following thebrowser.com for some superb interviews. It should be in the favorites list or just subscribe to their email list. The best part about these interviews is you get to know about new books (as each person is asked to pick up five books) and then the broad research/thought process of the specialist.

The latest in the interview list is Francis Fukuyama, leading scholar on international polity speaking on the financial crisis. His choice of five books are pretty well-known barring the FCIC report.

The main point by Fukuyama is the crisis was a great reason to fix many issues with the current state of affairs. However, it has been terribly wasted:

Nexus between gender-energy-poverty..

B. Sudhakara Reddy and Hippu Salk Kristle Nathan of IGIDR write this interesting paper.

Was Riksbank monetary policy in 1930s innovative?

Riksbank is seen as the first bank to start price level targeting during great depression. This was a precursor to inflation targeting  and is often cited as an example for central banks taking up price level targeting. This along with several other novel initiatives makes it an innovative central bank.

This paper by Alexander Rathke, Tobias Straumann and Ulrich Woitek says Riksbank mon pol in 1930s was not really innovative. For all that acclaim it has got, it is just overvalued. IN reality all they were doing is keeping its exchange rate undervalued so that exports remain competitive and economy can grow. As a result Sweden recovered much faster than others but it was not because of innovative policy but beggar thy neighbor policies:

Project Firefly: A great opportunity for economics/foreign policy students

Prof  Simon Evenett of St. Gallen University alerts me to this wonderful initiative for students called Project Firefly.

The idea is to bring talented minds in the field of economics/business/foreign policy together on a common platform.

Reviewing role of monetary policy in the 2007 crisi

Here is a superb speech from Jean-Pierre Danthine of Swiss National Bank.

He points to three theories which have targeted monetary policy for the crisis for different reasons. All these say concepts of inflation targeting were misapplied:

Fed’s low interest rate policy to remain till low 2014

On reading FMOC  statement for Fed’ monetary policy held on 25-Jan-12, I was stumped. It said zero policy rates to remain till end-2014. It got sharp reactions when it was extended to mid-2012 in Sep-11 policy. Now zero policy rates have been extended further by 18 months to end-2014. Looking at economic projections, they are better than Nov-11 projections. And then recent data has been much better than anyone expected including Fed.

TGS Blog does a superb analysis and criticism of the recent Fed move. I just don’t need to  say anything more…

A guide to RBI’s weekly statistical supplement

This has taken a long long time. Each time I decided to do something on RBI’s weekly stats supplement (WSS),  I got lost.

Finally, I have managed to understand some portions of it and have put them in this paper. This analysis will be in two parts. In the first part I have looked at WSS tables related to RBI’s monetary operations. There are three main tables I look at:

• Table 1: RBI’s balance sheet
• Table 2: Forex reserves
• Table 8: Reserve Money

The other tables  are related to banks and financial intermediaries and will be covered in a future report.

I hope this helps the visitors understand a bit about RBI’s operations and ofcourse the WSS..

Opposing liberalization in retail – Italy vs India

Gulzar points to this interesting comparison. It seems there has been opposition in Italy as well over liberalization of  retail market. India opposed FDI in retail and  Italy opposed  more flexible hours in opening/closing of retail shops!!

However in India it may have some justification, in Italy it just seems to be anti-competitive.

Global financial crisis and new awakening

A nice speech by B. Mahapatra ED of RBI. He speaks at the convocation ceremony of one of the B-schools in Mumbai. Summary is:

Let me now sum up. I started with the Arab Spring Movement – a social revolution. I thereafter discussed the growing frustration of the public with corporate greed and wealth disparities that symbolised the Occupy Wall Street Movement.  I touched upon the Los Indignados Movement in Spain reflecting the angst of the public which has grown resentful of the economic and political systems. These have been the three standout “awakening” movements of 2011. All the three movements have used social networking platforms effectively to arouse public opinion and thus highlight the power of the youth when unified. I have thereafter touched upon the economic, strategic and ethical factors behind the crisis and the lessons to be learnt. I have particularly underscored the ethical dimensions which you must keep in mind throughout your life.

It has some nice basic info on the various social movements  in 2011…does not include the anna movement on corruption though…

Books on newspaper/media dynasties

Dynasties and in particular newspaper dynasties are a great topic to follow and read.

Amanda Smith picks five books which provide some more spice on the topic.

Are markets now overestimating risks in Europe?

Paul De Grauwe and Yuemei Ji have written a paper on the same. They summarise it here.

They say first markets underestimated the risks between 2001-08  and are now overdoing things.

Is CRR a liquidity or a monetary tool?

Is the title of my new article in Mint.

The print edition has a pretty interesting pic as well (page 4). It is there in the e-paper (dated Jan 25, 2011) as well. Was quite interesting to get photos clicked like that…

RBI’s Third Quarter Review of Monetary Policy 2011-12

Here is the review of today’s monetary policy. Loads of confusions over CRR…

How central banks are ruled by men from MIT…

I wish there were more women central bankers and trained at MIT..,the title of the post would have been less biased..

In case people have not read this article, it is a must read. Our economic lives are increasingly in the hands of econs trained at MIT:

India vs China: Services vs Manufacturing

Ejaz Ghani has been providing lots of insights on Indian economy on voxeu. His recent column looks at the ever hot topic – differences  between India and China..More importantly what drives growth in services in India and manufacturing in China..

It has been a real busy day thanks to RBI’s monetary policy (review coming soon). Hence can only point to stuff today…

 

Making economics exciting to teach…

Peter Boettke has this superb note on one of the most universal aspects of world of economics – teaching the subject poorly.  And if at GMU he feels this, one can just imagine the plight of thousands of students in other parts of the world.

Spain’s labor market woes

Samuel Bentolila, Juan Dolado and Juan Francisco Jimeno write this super post on the topic.

RBI’s Q3 2011-12 Monetary Policy: Expectations

RBI’s monetary policy coming up on 24-Jan-12.

Here is a research report on the background  under which the policy decisions are likely to be taken. It includes expectations as well..

In each policy, RBI has some interesting decisions to make. This one is no better…

Comments/expectations welcome.

Gokarn’s speech referred in this report  is here