Archive for January 21st, 2019

20 years of Euro: a glass half-full or half-empty?

January 21, 2019

My new piece in moneycontrol.


Examining the trade-off between price and financial stability in India

January 21, 2019

Ila Patnaik, Shalini Mittal and Radhika Pandey of NIPFP in this recent paper find trade off between price and fin stability:

In recent years, many emerging economies including India have adopted inflation targeting framework. Post the global financial crisis,
there is a growing debate on whether monetary policy should target financial stability. Using India as a case study, we present an empirical
approach to assess whether monetary policy can target financial stability. This is done by examining the trade-off between price and
financial stability for India. Using correlation between price and financial cycles, we find that a trade-off exists between price and financial
stability. Our finding is robust to a series of robustness checks. Our study has implications for the conduct of monetary policy in emerging
economies. Presence of a trade-off may constrain the ability of a central bank in emerging economies to target financial stability with
monetary policy instrument.


Turkey’s central bank pays early interim dividend…

January 21, 2019

Turkey’s central bank pays an early dividend worth 33.7 billion Lira (HT:

Apparently, the dividends are paid annually in April as per the law. But the law was amended to allow an interim dividend..



How and why did we start collecting economics statistics (such as inflation, GDP etc.): Case of US

January 21, 2019

A really nice paper by Prof Hugh Rockoff of Rutgers Univ.

He discusses an area which is seldom discussed in economic research which is origins of statistics/data which help us understand the trends in an economy. How and why did we start collecting data on things like inflation, employment and output? He discusses the US case:

Although attempts to measure trends in prices, output, and employment can be traced back for centuries, in the main the origins of the U.S. federal statistics are to be found in bitter debates over economic policy, ultimately debates over the distribution of income, at the end of the nineteenth century and during the world wars and Great Depression. Participants in those debates hoped that statistics that were widely accepted as nonpolitical and accurate would prove that their grievances were just and provide support for the policies they advocated.

Economists – including luminaries such as Irving Fisher, Wesley C. Mitchell, and Simon Kuznets – responded by developing the methodology for computing index numbers and estimates of national income. Initially, individuals and private organizations provided these statistics, but by the end of WWII the federal government had taken over the role. Here I briefly describe the cases of prices, GDP, and unemployment.

Most of the time the origins of these stats was due to some or the other crisis. How some people (economists/statisticians) responded to calls from the polity to develop these numbers is quite a story…

Central Bank of Brazil looks through its 54 year histiry

January 21, 2019

Nice bit from the Central Bank. It is all in Portuguese so do press the translate option.

The Central Bank of Brazil is more than 50 years old. The conduct of oral interviews with personalities who contributed to its construction is part of the memory of this institution, which is so closely linked to the economic trajectory of the country.

The interviews allowed not only a tour of history, but also to experience the crises, conflicts, choices made and the opinions of those who gave a period of their lives for the construction of Brazil. At the same time, they constitute complementary material to traditional historical sources.

The set of statements clearly demonstrates the process of building the Central Bank as a state institution, persistent in fulfilling its mission. The concern with the construction of an organization with technical profile pervades all the interviewees. At the same time that they were building the structure, they sought to adopt the necessary economic policy measures to achieve their mission.

Our expectation with the publication of these interviews is to contribute with a better understanding about the evolution of the Institution and its performance and stimulate the search for knowledge about the economic history of the country and about how the Central Bank pursues its objectives of guaranteeing the stability of the power of purchase of the currency and the soundness and efficiency of the financial system.

One just gets profiles of the interviewed personalities in English. The interviews remain in Portuguese and one hopes the central bank translates them to share it with the wider audience.



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