Archive for October 3rd, 2018

Curaçao and Sint Maarten Islands to launch a new currency

October 3, 2018

It is fascinating to keep learning about monetary/currency arrangements across the world.

I just learnt about Netherlands Antilles which was a group of  seven island countries in the Carribean. The group was dismantled in 2010 and two of its members Curacao and Sint Maasretn ran a monetary union with Netherlands Antillean guilder as the common currency pegged to US Dollar.

Now the two are trying to launch a new currency – Carribean guilder.

On a look at the history of the central bank which runs the common currency (named Centrale Bank van Curacao en Sint Maarten), one figures it was established in 1828, making it one of the oldest central banks in the world:

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Using Thirlwall’s framework to figure India’s Balance of Payments problems..

October 3, 2018

Trust Niranjan Rajadhyaksha to keep educating us about older generation of economists and their ideas.

As per Niranjan, India needs to figure was to fund its $75 billion current account deficit. This will act as a constraint on growth. We need to understand this In via the Thirlwall framework.

The uncomfortable question is how rapidly the Indian economy can expand in the long run without running into a balance of payments problem. Srinivas Thiruvadanthai of the Jerome Levy Forecasting Center recently pointed out the importance of assessing the balance of payments neutral growth rate that India can maintain. The English economist Anthony Thirwall said in a 1979 book that any country that has to maintain a current account equilibrium with a constant real exchange rate should grow at a rate equal to the ratio of the growth of exports to the income elasticity of demand for imports. A simpler explanation is that economic growth over the long run for a country that cannot easily fund its current account deficit is constrained by its export growth on the one hand and the income elasticity of its imports on the other.

Maybe Indian policy makers need to bring this insight back into their assessments of how rapidly India can grow without tipping into periodic balance of payments problems—to complement the usual discussions about the potential growth rate that keeps inflation close to the mandated target.

Hmmm..

Ideological Profile of Eugene Fama

October 3, 2018

Nice bit here by Econ Journal Watch:

This profile resumes the Econ Journal Watch projectexploring the ideological sensibilities of the economics laureates. Eugene Fama describes himself as a libertarian, and by his late twenties seems to have been well on the way towards such views. Like many Chicago economists, he firmed up those views during the 1960s and 1970s. He has not been outspoken, but he has lent his name to at least ten petitions, and events from 2008 called him into public discourse. He kindly provided answers to our questionnaire about his own ideological orientation over the course of his lifetime.

Ideological profiles are as important as citing works of prominent econs. Here is a whole list of profiles of the winners of the economics prize.

How economics became a (neoclassical) cult…

October 3, 2018

Prof Steve Keen of Kingston University London as always, is in full flow in this video.

He talks about neoclassical school being a cult (without them realising it), Minsky, need for accounting, balancing yin and yang forces in economics and so on. Good watch even if you don’t agree.

The role of money in wartime

October 3, 2018

This is a fabulous conference organised by Central Bank of Albania (detailed program here). The central bank opened a museum recently and has been organising conferences/events to spread awareness about the monetary history and current policies of the central bank. RBI should take a leaf from all such events and do something for our own history.

Elisabeta Gjoni, the deputy governor in her conference speech quotes Socrates:

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The gamma of banana: Beware of complex financial terminology used in finance..

October 3, 2018

Dhirendra Kumar of Valuresearch in this piece warns investors to stay away from fancy finance talk.

The moment a finance person uses Greek terminology to sell financial products/ideas, they are simply trying to impress that this bit is complex and beyond simple investors. So don’t ask questions, just shut up and pay:

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