Archive for December, 2017

When an Indian queen’s name was used on coins around 1st century BCE….

December 29, 2017

Fascinating bit of history. It points to Satvahana rule, when the King Satakarni I released coins with name of his queen Naganika on the coins.

The website Live History India is very promising with many insights on Indian history. The site does not allow to extract content and one has to visit the site for reading the content.



Centenary event celebrating 100 years of Indian Economic Association…

December 29, 2017

I had blogged earlier about Indian Economics Association completing its 100 years in 2017.

The Association is celebrating its centenary in Guntur (27-30 Dec 2017). The detailed program is here.

There is very little coverage of the event in the media or elsewhere. One only got to know of it when President of India inaugurated the conference:


The social origins and IQ of inventors

December 28, 2017

Interesting research but one could have guessed the results. Philippe Aghion, Ufuk Akcigit, Ari Hyytinen and Otto Toivanen look at the social profile of the investors:


Why is Italian food so amazing?

December 28, 2017

Fascinating piece by Megan Mcardle of Bloomberg. She wonders why Italian food is always so much better than that in US:


Why Greece is banking on China’s modern-day Silk Road to help its economic recovery

December 27, 2017

Interesting bit of news.

How one of the Greek ports which was used in earlier Silk Road is going to be used again in the modern day silk road:

Greece hopes to transform its ancient port of Piraeus into the entry point for an extensive network of roads and railways that will allow China to penetrate into the heart of Europe, its ambassador to Beijing has said.

China’s ambitious push to build a modern-day Silk Road through Asia and Europe has suffered a number of rebuffs in recent weeks after Pakistan, Myanmar and Nepal cancelled put on hold a number of major infrastructure projects funded by Chinese investment.

But Greece, a key point along the route of the ancient Silk Road, will once again serve as the hub connecting Asia, Europe and Africa, according to Leonidas C Rokanas.

“Eventually, Piraeus will become the main entry point for Chinese exports to southern, eastern and central Europe,” Rokanas told the South China Morning Post. “To use a Chinese metaphor, Piraeus will form the “head of the dragon” of the so-called land-sea express route, leading to the heart of Europe through Greece.”


This is a superb visual explainer of what the modern day Silk Road (called One Belt One Road) is proposing to do..

Should South Africa Central Bank be nationalised?

December 27, 2017

South Africa Reserve Bank, the central bank of the country, was the first central bank established by British in its colonies. Most central banks then were private entities but were later nationalised on independence like India.

However, SARB remained in private hands and is one of the few central banks owned by private shareholders.

Recently, there have been talks that African National Congress wants to nationalise the bank (20 Dec 2017):

The ANC has resolved that the South African Reserve Bank (SARB) should be nationalised and the existing structure of private shareholders within the central bank should be done away with.

The Economic Transformation Committee briefed the media on Wednesday night about the policies it had adopted.

In June/July, the 5th ANC policy conference resolved that the SARB should be nationalised and the central bank should have greater interaction with the Minister of Finance.

However, the central bank released a statement saying it will hardly matter as private shareholders do not influence monetary policy:


Why are cities so resilient while corporations so fragile? Lessons for bitcoin/cryptocurrency…

December 27, 2017

Interesting piece by Eran Shir.

He asks: why are cities resilient and corporations so fragile?


Israel planning its own e-sheckel…

December 26, 2017

Well as the saying goes:  “if you can’t beat them then joint them”.

After dismissing private digital currencies for quite sometime, the central banks are warming up to the idea. Some central banks like Sweden are thinking of issuing their own digital currency like whereas some others like Denmark and Finland have expressed reservations against the idea.

The latest to join in the first list is Israel:


A potpourri of crazy economic realities that can be explained by simple demand and supply…

December 26, 2017

Ajit Ranade in this piece:

The year is ending and the holiday spirit is upon us. So rather than discuss some glitches in GST implementation or what to expect in the upcoming Union Budget, here is a potpourri of interesting and somewhat weird economic facts. They are not really that weird or crazy, once you work through supply and demand logic. So think of it as some stretching exercise for your economics muscles.

1. Sensex at new record high

The stock market index reached a new historic peak of 33,940 this week. The headlines usually are breathless. The financial news channel say “there was a wave of buying today”, indicating strong demand for shares. Obviously, if share prices are going up, then there must be a huge demand, and hence a strong wave of buying.

But wait a minute. In the share market, you cannot buy unless there is a seller. So why don’t the channels scream “there was a wave of selling today”! Indeed on any given day hundreds of millions of shares are traded. When offer price increases and buyers respond, the price starts trending up. If demand is strong, then price keeps going up.

There is anonymous, electronic order matching between sellers and buyers of shares, who are making offers and counteroffers. So remember, prices are going up, but lots of people are selling.

🙂 There are several others.

Just that the moment papers scream -“there was a wave of selling today” – the sentiment could just be reverse and lead to panic of sorts.

Finance is a one way street. Despite there being sellers on the other side one has to always pitch the demand/buyer side of the story. Most research reports are just “buy” with very few saying “sell”. The whole idea is to keep the sentiment going on one direction of buy despite the fact that for every buyer there is a seller..

In defense of so called jholawala economist and their economics…

December 26, 2017

Jean Dreze (now in Ranchi University) who has written a book by the same name dismisses the term- jholoawala economist. But he says that economics and activism goes hand in hand. It actually makes economics better as the subject experts try and reach out to people:


What’s in a name? Ask banks: History of Indian banking through banknames…

December 25, 2017

First of all wishing all the blog viewers Merry Christmas.

Here is my latest piece in Mint newspaper. In this one looks at history of Indian banking through changes in names of banks pver more than 200 years of history.

We might not realise but bank names are really important at their inception as bankers try and generate trust via their names. They use locations, personal names, community names and so on to generate that initial response from customers. In India’s case, this becomes even more interesting as banks names have changed with ongoing political and economic developments.


Assessing the risk of inverting yield curve in US…

December 22, 2017

Speech by James Bullard of St Louis Fed given on 1 Dec 2017.

He says based on current trends and future projections, US yield curve could begin to invert around late-2018:

• Let’s suppose that longer-term yields remain near the average since 2012.
• Let’s also suppose that the FOMC remains on track to raise the policy rate at the pace suggested in the SEP.
• Under this scenario, the U.S. nominal yield curve would invert in late 2018.
• This scenario would not play out if either (1) the FOMC does not raise the policy rate as aggressively as suggested by the SEP, or (2) longer-term rates begin to rise in tandem with the policy rate.

And then as we know, inverted yield curve is a great predictor of recessions.

We are back to full circle with so much monetary interventions and policies. It started with US yield curve inverting in 2007 whose signs were ignored. This was followed by failure of Lehman and AIG leading to all kinds of monetary interventions. And now 10 years later, we are again seeing signs of inverted yield curve…

Building a Sovereign Benchmark yield curve: Tunisia edition…

December 22, 2017

Usually having some form of Sovereign yield curve is one of the first building blocks of a financial sector. It forms the basis on which multiple financial instruments are then priced and traded. But then this bit is taken for guaranteed and hardly the focal point for any discussion om financial sector developments.

Thus it was interesting to read this bit from European Bank for Reconstruction and Development (EBRD). EBRD helped the Tunisian government develop its yield curve:


Crisis and Response 2008–2013: Perspective from Federal Deposit Insurance Corporation (FDIC)…

December 22, 2017

The central banks are always in the thick of things during both good and bad times. Most commentary is driven from their perspective. However, in US case typically FDIC plays a fairly crucial role. It has to deal with the muck created by policies of both central banks and the government.

FDIC has released a report giving its perspective on the 2008 crisis.


Central bank of Finland on issuing digital currency…anonymity is important

December 22, 2017

JP Koning had earlier pointed how anonymity is important feature for any form of currency to become widely accepted money.

Bank of Finland in its publication released earlier also thinks so (HT: JP Koning again):


Eastern Libya appoints its own central bank Governor..

December 22, 2017

This blog had written earlier how Eastern part of Libya has its own coins imported from Russia.

Now, the Eastern Wing has appointed its own central bank Governor as well:

A Libyan legislator says the parliament based in the east has appointed a new governor for the central bank, which could heighten tensions with the UN-backed government in Tripoli.

Saleh Afhaima told The Associated Press on Tuesday that the House of Representatives based in Tobruk approved Mohamed el-Shukri as the new governor of the bank, which controls the country’s oil revenues.

The parliament sacked Sadik el-Kabir and appointed his deputy, Ali Hibri, as the new head of the Tripoli-based bank in September 2014. El-Kabir challenged the decision and says he remains at his post.

Libya descended into chaos following the 2011 uprising that toppled and killed dictator Muammar Gaddafi. The oil-rich nation is now split between rival governments and militias.

How politics and central banks remain intertwined despite whatever people might say over their independence from the government…

Islamic finance is becoming attractive for even non-followers of the religion…

December 21, 2017

Amidst the backlash against Islam, the principles and practices of Islamic Banking/finance are being appreciated by non-followers. As they say money has no color and even religion..


125 years of National Archives of India: The colonisation of knowledge and politics of preservation…

December 21, 2017

One had blogged about how National Archives of India is in a bad shape.

This EPW piece by Sana Aziz of AMU reflects on the 125 years of the Archives (established on  March 2017):


If Kolkata is the ‘cultural capital of India’, why is its public art so ridiculous?

December 21, 2017

Deepanjan Ghosh asks this question on Scroll:


Expert Panel appointed to review Reserve Bank of New Zealand’s to widen the price stability mandate…

December 21, 2017

This talk of widening the pioneering price stability mandate of RBNZ started with Labor Party campaigning that it shall include employment in the central bank goals. Now with Labor Party at helm, the talks only thickened.

Now the Government has appointed an expert panel to review the framework:


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