Archive for April 27th, 2015

Paul Krugman’s Love Affair with France..

April 27, 2015

An article disputing Krugman’s assertion that austerity loving UK grew slowly that stimulus loving France.

(more…)

Advertisements

Noise around India’s shift to full capital account convertibility..

April 27, 2015

As ME was away, capital account convertibility issue again cropped up in discussions on Indian economy.  It is amazing how we make such noise around something whose benefits and risks have been overstated for such a long time.

Before we discuss the issue further, what exactly is a capital account and what is an open capital account? The expression comes from Balance of Payments of a country which represents the account of a country with other countries/institutions. So, we have a current account which records exports and imports of a country. Then there is a capital account which is a mirror image of current account. So, if there is a deficit in current account, one needs surplus in capital account to balance the payments (& vice-versa). Capital account shows all the inflows/outflows from other countries. Includes popular items like FDI, FII, External borrowings etc. etc.

So, if you open the current account it means that one can import and export freely from all countries with some basic regulations in process. In case of opening capital account it means you allow import and export of capital as well. So, one can buy Indian shares freely as Indians can buy shares of other countries freely. Likewise Indian companies can borrow freely from banks based abroad and foreign companies can borrow from Indian banks.

(more…)

Perhaps the media is getting a reality check over hype it created over Indian government..

April 27, 2015

As the one year review of the Indian government draws close, some previews are already doing rounds.

In this article, Mihir Shah says the media has perhaps been too kind to the new government. Talk about some one creating massive illusion and itself falling in it.

(more…)

Game of Thrones Economics: Why Doesn’t Westeros Have A Central Bank?

April 27, 2015

I have no idea about Game of thrones or Westeros.But this article on why there is co central bank in the game is interesting.

The Austrians would be happy seeing no such thing and attribute the success of the game for its absence. Whereas other schools might add that to spice the game, a central bank is a must…


%d bloggers like this: