Archive for June 18th, 2012

Democrats vs Republicans: Who cares more for inequality?

June 18, 2012

I don’t know anything about this and have hardly read anything to substantiate the claims.

Timothy Noah an American journalist, in this superb interview on inequality says:



Mastercard Karl Marx credit card!!

June 18, 2012

Alex Tabarrok of MR points to this interesting development:

The Karl Marx credit card now available in Eastern Germany for when you really need kapital. Planet Money is looking for taglines which you can tweet to @planetmoney. Here are a few good ones:

  • “What’s in YOUR wallet? Seriously, though, I need to see your papers. Now.”
  • @planetmoney There are some things money can’t buy. Especially if you abolish all private property. #marxcard


Does democracy lead to economic reforms? And vice-versa?

June 18, 2012

I missed this IMF paper written in 2010. It is doing the rounds now as an NBER 2012 paper.

The paper looks at a huge dataset connecting economics with politics. It says democracy does lead to econ reforms. However, evidence does not support econ reforms  fostering democracy:


RBI’s Mid-Quarter Monetary Policy Review: June 2012

June 18, 2012

Here is an analysis of RBI’s mid-quarter review of monetary policy held today.  RBI statement is here.

Overall, very interesting to see the RBI surprise to keep rates unchanged. Most expected 25 bps in Repo and  50 bps in CRR. RBI gave a big thumbs down refocusing on inflation. I just hope the focus remains on inflation till it finally comes down. Our policymakers rejoice a bit too quickly seeing  inflation decline in a few months. It is amazing how quickly inflation concerns resurface each time we think it is headed down.

India’s Core inflation calculation — confusions and clarifications

June 18, 2012

This is a followup to the post on calculating India’s core inflation. Actually, I should have  expanded the post then but kept forgetting it.

In the previous post, I explained how one can estimate core inflation from the headline WPI inflation numbers. The idea was to exclude Manufactured Food Index from Manufacturing Products Index. This then becomes Non-Food Manufacturing Products Index. This is nothing but core WPI index (as RBI calls it) and based on the index we can calculate core inflation.

Actually there is another method as well and this is a source of confusion. The data based on the two methods should be same, but this is not the case because of rounding effect. Sometimes the differences are quite large leading to added confusion on which one to report.

Where the first method helps calculate core via exclusion, the second one is via summation method. This is how it goes:


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