Archive for January 27th, 2014

Should Fed abandon targeting fed funds rate and move instead to reverse repo rate?

January 27, 2014

An interesting paper by Joseph E. Gagnon of PIIE and Brian Sack of D. E. Shaw Group.

They say targeting Fed funds rate will be ineffective as an when Fed decides to exit from easy policy. A better tool would be reverse repo rate which will help Fed absorb liquidity:

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Having fun with history…

January 27, 2014

Anurag Behar of Azim Premji Foundation, has this really nice piece on teaching history.

He points how history can be so exciting is taught properly.  He begins by saying how he did not like history when at school and how it missed telling key events.

And then points to this interesting anecdote on teaching history..

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RBI’s other MPC problem – Minting, Printing and Counterfeiting..

January 27, 2014

RBI has been in news for two things.  One for its mon pol framework and other for its decision to take back currency notes issued before 2005. Interestingly both the news have a common acronym –  MPC – which is central to the issue. For first news,  MPC stands for Monetary Policy Committee and for second it stands for Minting, Printing and Counterfeiting..

In an interesting article, Prof Vivek Moorthy of IIMB helps understands this second MPC problem of RBI. Needless to say lot less is written about this second MPC which is far more important than the first MPC which is just a reorganisation exercise :

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