Archive for April, 2012

The world’s oldest fiscal watchdog…CPB Netherlands Bureau for Economic Policy Analysis

April 23, 2012

Here is an amazing paper on an institution which is really different. It is not just the first fiscal watchdog but does some amazing functions  as well.



The homeopathy approach to Reforms

April 20, 2012

A fascinating piece by TN Ninan. It has been picked up from his speech he gave on the launch of this book – India’s Economic Reforms and Development: Essays for Manmohan Singh.

He looks at the issues boggling India reform story:


Economists and their platonic vision of economic models

April 20, 2012

A nice interview of Jonathan Schlefer of HBS. He is a political scientist and has written a book called – The Assumptions Economists Make. It seems both econs and non-econs are having a great time writing books.

Shclefer gives a nice perspective on  econs and their models:


Central banks and society

April 20, 2012

A nice speech with some philosophical nuggets by Masaki Shirakawa, Governor of BoJ.

He touches on several central banking issues:

  • Central bank policies in the current crisis
  • How crisis changed the mandate of central banks
  • What central banks can do? (Price Stability and Lender of Last Report)
  • What central banks cannot do? Resolve structural issues)
  • Full potential of central banks (realised when public finances are sustainable, credibility of central bank, support for market economy

A good read.

Here is some nice history from the speech:


Did rise in inequality lead to increased opposition to Keynesian stimulus?

April 20, 2012

Well, we have some more interesting extension to rising inequality in US.

Krugman and Robin Wells in this article say two main things.


Neither Washington nor Beijing Consensus, need African models to fit realities and cultures

April 19, 2012

A nice speech by  Sanusi Lamido Sanusi, Governor of the Central Bank of Nigeria.

He looks at the two broad frameworks of development – Washington and Beijing (fashion is better suited than frameworks actually). And then says how both are inadequate to sort Africa. What is needed is a seperate consensus and a model which fits into African culture and reality. Whereas the two fashionable ideas moreso Washington Consensus ask countries to change as per the model:


Enabling Affordable Housing for All in India – Issues & Challenges

April 19, 2012

A nice speech by RBI Dep Gov HR Khan on the topic.

He covers a fair bit of data and connects the dots on an area which is extremely important but much is unknown.  We hardly have any reliable data to track developments in the housing sector.

But then unless someone talks officially about the huge shadow/black economy in housing, we are just focusing on one part of the problem. I mean it is so ridiculous that even if someone has the money he cannot really buy a house in most parts of the country without paying black money. Our government keeps talking about making efforts to brings all black money invested abroad. Why not do something to address a problem which is so rampant in your own shores?



Using accounting devices to hide fiscal deficits – a framework

April 19, 2012

Timothy Irwin of IMF has this excellent readable paper on fiscal math.  Both fiscal and monetary math and accounting is challenging to say the least.

Irwin says using these accounting devices, govt hides figures and creates fiscal illusion that all is well:


A primer on ECB/Eurosystem accounts and balance sheet

April 18, 2012

A very very useful article by ECB on its accounts and balance sheet in its April-12 Bulletin (click on this if first link does not work).

After working on RBI’s WSS (part-I and part- II) and ECB’s TARGET2 Balances, I am getting really interested in the central banking operations and balance sheets.

But I don’t think anything beats ECB and Eurosystem balance sheet in terms of complexity. Eurosystem balance sheet is humongous, summing ECB operations with 17 economies’ national central banks.

This primer should help clarify some doubts and lead to some more. Read this report keeping the ECB balance sheet in front for more clarity..

RBI econs should help us with a similar product….

What Isn’t for Sale?…Do we want a market economy, or a market society?

April 18, 2012

What Isn’t for Sale? is the title of a new book by Harvard Philosopher – Michael Sandel. I was ignorant but Sandel is a huge rockstar. His course on Justice is one of the most sought in Harvard.

Atlantic prints a snapshot from the book which is quite a read. He says these days almost everything is up for sale.


Temasek and Singapore Puzzle – Is it another Madoff crisis in making?

April 18, 2012

Christopher Balding of HSBC School of Business writes this riveting piece. He titles this paper interestingly as  –  “Brief Research Note on Temasek Holdings And Singapore: Mr. Madoff Goes to Singapore”. 

The paper makes two points.

First, there are some issues with Temasek’s financial reporting. It seems to be showing a much higher return on its portfolio since inception than most of the equity indices in the period.

Second, there is this interesting puzzle. Singapore has been running high fiscal surpluses but its public debt keeps going up. Perhaps the only country in human history to have such a record:


RBI’s Annual Monetary Policy 2012-13: Review

April 17, 2012

Here is an analysis of RBI’s Apr-12 Annual Monetary Policy. The expectations from the policy released earlier is here.

Really surprised by RBI’s 50 bps cut and a dovish stance.


Why Harvard is and remains the No.1 university?

April 17, 2012

A nice ppt by Shailendra Raj Mehta of IIM-A (HT: Cowen) (see this as well).

The reason cited is alumni control of Harvard’s  Board of Trustees.


Niall Ferguson’s intellectual infleunces: Keynesians vs Vulgar Keynesians

April 17, 2012

interview of the Harvard historian.

It is interesting to have a scholar who is influenced by both Keynes and Smith. Being a Scot, Adam Smith was bound to be in the list. Addition of Keynes is interesting given his so called anti-fiscal stimulus views.

He dfferentiates between Keynesian and vulgar Keynesian:


Economics of cloud computing

April 17, 2012

Economists have a tendency to poke their noses into anything and come with an economic perspective on the same. Some turn out to be interesting and others are just awful.

Chaim Fershtman and Neil Gandal of Tel Aviv University have this interesting economic perspective on cloud computing (a longer version here):


Ignorance around Eurozone/euroarea crisis

April 13, 2012

I better be clear about a few European terms. EMU stands for Economic and Monetary Union. It isn’t European Monetary Union. Infact there apparently is nothing official called as European Monetary Union.

What we loosely call as EMU where 17 econs share a single currency Euro is basically euroarea which is not even a proper noun. It is based on the earlier dollar area, sterling area etc.

Richard Baldwin addresses a few such issues in this terrific post. He looks at the results of the Eurozone break up contest and says why all this ignorance is leading to some serious wrong prescriptions.

Analysing the shift from gold standard to inflation targeting central bank..using central bank balance sheet

April 13, 2012

An amazing post by  of Worth a lot Canadian Blog (As they dont change the name of the blog, I have done so; it isn’t just worthwhile).

We study all these different  monetary policy frameworks and shifts from one regime to other. We mostly have a pretty lame  understanding of these frameworks. Rowe translates all these via the central bank balance sheet.

Read the post for details.


Gauging corruption in a country via monitoring parking violations

April 13, 2012

This blog is a big fan of papers which use innovative ways to gauge some micro/macro issue.

This paper by Raymond Fisman and Edward Miguel use a similar way to track corruption in an econony.

NY City is place to large no. of diplomats. Before 2002, these diplomats could engage in parking violations, get tickets but were not really liable to pay penalties. A law after 2002 changed this. So, the authors look at these violations and analyse it with corruption in their home countries. They find that people who violate more happen to be from more corrupt countries!


Importance of culture for development

April 13, 2012

A fab econ history paper by Nathan Nunn of Harvard.

He explores the role of culture in eco development. He says cultural beliefs help develop  institutions which in turn lays the foundations  for eco growth and development:


Thinking about Hooligans as rational economic agents…

April 12, 2012

One just wishes we have such papers included in econ courses. It will even get hooligans hooked onto the subject and perhaps bring a change in the behavior…

Peter Leeson, Daniel Smith and Nicholas Snow write a fab paper on the topic. They model hooligans as rational agents who derive utility from picking fights:


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