Archive for June 10th, 2013

Reducing car ownership in India..

June 10, 2013

nice paper by  Akshima T Ghate and S Sundar with very useful data on car usage in India’s cities.

The per capita car registrations in India may still be low compared to world standards but some Indian cities have higher car owndership than Singapore, HK etc. And growth rates of car ownership is rising bigtime as well. They say we need to check this growth:

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Monetary history of Ottoman Empire..

June 10, 2013

One of the many interesting aspects of reading econ history is to know of certain historical events which one is so ignorant of. For instance, it is unlikely that normal people read on Ottoman empire history unless you are a history student.

Thanks to this nice paper by Ali Coşkun Tunçer of LSE that I got something to know of Ottoman Empire. This paper talks about monetary systems adopted by Ottoman empire during the gold standard era.

This study analyses the functioning of the “gold standard” in the Ottoman Empire during the pre-1914 gold standard era, with specific emphasis on the institutions regulating commodity money and fiat money. It explores the extent to which the Ottoman monetary system was an outlier with reference to the experiences of other peripheral countries. One of the findings reveals considerably limited circulation of notes in the Ottoman Empire even after adherence to the gold standard in 1880. By highlighting the anomalies of the Ottoman case, this paper concludes that the transition from commodity money to fiat money did not take place at the same rate across peripheries during the pre-1914 gold standard era. These differences may be explained by the relative autonomy of the central banks of issue from governments, and in turn may have implied changing degrees of monetary sovereignty and fiscal capacity across the members of the golden periphery.

Notice the periphery debate bit? So just like we see in EZ case where peripheries struggled to adopt Euro, same was the case in Gold Standard as well. Monetary historians have compared the Euro to Gold Standard and this paper is a more specific example of why we need to be skeptical of fixed exchange rates whatever their form may be.

Though, again the debate is rife with many people skeptical of today’s fiat currency standards where there is just no backing to the currency. The government declares by fiat the legal tender and like a magic wand it becomes a currency of circulation. This allows both the C-bank and government to go crazy on printing once a while or many a while

So debate is on..


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