Archive for April 4th, 2017

RBI Board clears proposal to introduce Rs. 200 notes: Another decision in secrecy?

April 4, 2017

There was a lot of criticism over the introduction of Rs 200o denomination. It was issued immediately after demonetising so called high notes of RS 500 and Rs 1000. Moreover, the velocity of Rs 2000 denomination is much lower and created further chaos. People said if at all, the RBI/ Government should have introduced smaller denomination notes like say Rs 200. This blog’s research also shows that this will be a totally new denomination just like Rs 2000. This has to be first approved by RBI Board and then the Government.

Perhaps taking a cue, RBI Board has cleared printing of Rs 200 note. Gopika Gopakumar of Mint reports:

The board of the Reserve Bank of India (RBI) has cleared a proposal to introduce banknotes of Rs200 denomination, two people aware of the development said.

The decision was taken at the RBI board meeting in March, these people said. They didn’t want to be identified as they aren’t authorized to speak to the media.

The process of printing the new Rs200 notes is likely to begin after June, once the government officially approves this new denomination, said one of the two people cited earlier.

However, there is one catch.

If this is true, then again we have a decision on new currency note taken in secrecy. A lot depends on the veracity of the news.

This time it is even a bigger secret as there was no Board meeting in March as per the website (select 2017 and then March in right menu). As per RBI Act, Section 13:

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The upcoming RBI’s Monetary Policy Meeting: Just 20 minutes of media interaction?

April 4, 2017

It has been a tradition (not sure when it started) to have media interaction post monetary policy decision. Earlier, this was limited to Mumbai based media which was later expanded to others who could as questions over teleconferencing. It was interesting to see people from regional media ask questions. The idea was to reach out to as many as possible. Generally the time for such events have been around 45 mins to 1 hour .

But things have been changing recently. There has been some criticism/concern over RBI top management’s reluctance to interact with media post policy. It seems now only invitees are asked to attend the conference. The Economist  India head even raised over not being called for the conference second time around. Though, some commented it was nice to see likes of Doordarshan getting a chance to ask questions whereas earlier this was just dominated by either foreign press or Mumbai based financial media.

Later, there was an article reviewing 6 months of RBI’s New Governor titled as: Don’t Ask, Don’t Tell.  It is so much of a turn around since the hype generated when the appointment was done.

It seems RBI wishes to continue its policy of limited communications. In the forthcoming policy on 6 Apr 2016, media interaction is just for 20 minutes:

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How did the DSGE name begin and become so important in world of macro/monetary economics ?

April 4, 2017

Beatrice Cherrier has a post on the topic.

According to JSTOR, it was Robert King and Charles Plosser who, in  their famous 1984 paper titled Real Business Cycles, used the term DSGE for the first time, though with a coma (their 1982 NBER draft did not contain the term): “Analysis of dynamic, stochastic general equilibrium models is a difficult task. One strategy for characterizing equilibrium prices and quantities is to study the planning problem for a representative agent,” they explained upon deriving equilibrium prices and quantities.

There is lot more in the post.

The profession is really poor with naming such terms/models. Most of the time these names just scare/intimidate you. One does not know whether that is the intended purpose as well.