Archive for September 7th, 2017

Has Reserve Bank of India got its exchange rate strategy wrong?

September 7, 2017

There are again questions over what India should do with Rupee. Should its allow Rupee to appreciate or depreciate?

Niranjan takes you through many such questions:



Why aren’t questions asked to RBI Board over demonetisation?

September 7, 2017

There is a lot of blame game since the RBI Annual report 2016-17 was released. Much of the criticism is directed towards the Government as basically it was their decision.

However, the story is not entire clear here as basically the Government says RBI Board gave them the advisery to do so. There are a lot of questions and clarifications over RBI Board’s role in demonetisation. Now one may agree or disagree with their specific role but one can’t get away saying that the Board had no role to play. Unlike previous two demonetisations where RBI Governor said no, so the Board was not involved and the decision was made by government under closed doors. So the entire thing rested with the Government.

This time around this is not the story as RBI Board was involved. The former Governor in his recent statements said that RBI was not involved in demonetisation under his term, so something must have happened in the two months to convince RBI to agree to the decision.


A Program to Stabilize the Economy in Four Words: No further credit expansion!

September 7, 2017

The way out of a credit influenced crisis is ….give more credit,  goes the mantra. This is how most policies around the world are…

Joseph Salerno points to Mises 4 words which can stabilize the economy in 4 words:

Paul Cantor, Clifton Waller Barrett Professor of English at the University of Virginia and Associated Scholar of the Mises Institute, attended Ludwig von Mises’s seminar at NYU as a young man. He recently surprised and delighted a few of us by revealing that the line that he remembers Mises speaking most frequently in the seminar was “No farzer credit expansion!”  As a native German speaker with an accent and less than complete familiarity with English usage, what Mises meant to say, of course, was “No further credit expansion!” Upon hearing this, it struck me that Mises pithily summed up in four words a program for “stabilizing” the economy, that is, abolishing booms, bubbles, and recessions. Why the entire program could—and should—be printed on a T-shirt.

No further credit expansion!


They should send these Tees to all finance minstries and central banks across the world as gifts!

Monopoly without a Monopolist: An Economic Analysis of the Bitcoin Payment System

September 7, 2017

This is the title of a Bank of Finland working paper by Gur Huberman, Jacob D. Leshno and Ciamac Moallemi.

Though fairly technical, the paper has some interesting observations:


Should we raise prices during a natural calamity?

September 7, 2017

There was a huge uproar when price of flights increased sharply during Chennai floods in 2015. Likewise, there is always this criticism on Uber/Ola who increase prices due to huge demand.

Prof.  Mark Steckbeck of Campbell University thinks otherwise. It was due to the high prices he could get milk  as snowfall was expected:


African protests over CFA Franc colonial currency..

September 7, 2017

Troubling set of developments in West Africa. Even if colonial powers have ceded control they continue to shape the destinies of their colonies via laws, institutions and of course money.

It so happened that French-Beninese national, Kemi Seba burned a 5000 CFA Franc note protesting against the colonial currency. He appealed to the African countries to issue their own name currency.


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