Archive for January 31st, 2019

Case of ICICI Bank: Corporate whistleblowers are India’s newest heroes

January 31, 2019

Nice piece by Sudeep Khanna:

From Satyendra Dubey to Arvind Gupta, a few brave men and women have over the years striven to expose the stinking caverns within Indian companies even as agencies and executives charged with that task failed to do their duty. Dubey was an Indian Engineering Services officer working as a project director for the National Highways Authority of India in which capacity he exposed serious financial irregularities by contractors of the project. For that brave deed he had to pay with his life, murdered in cold blood on the night of 27 November 2003.

His sacrifice though was not in vain as the uproar over his death led to the Public Interest Disclosure and Protection of Informers Resolution (PIDPIR) in 2004. Gupta, in the news now, blew the lid on the alleged loan fraud and the quid-pro-quo between Chanda Kochhar and her family and the Videocon group, a case which is now being probed by the Central Bureau of Investigation.

Dubey and Gupta and a handful of others like them, given the honorific label of whistleblowers, are only now coming out of the shadows and serving as models for others to emulate. Figures show that the number of complaints Indian companies are receiving from whistleblowers is increasing at a rapid pace.

Whether it is in the infamous Satyam fraud in 2009 or in the more recent case of the Zee group, it has been a missive from a whistleblower that has precipitated the crisis.

We clearly need to protect whisteblowers across spectrums.

Revisiting Taylor Rule in this era of low inflation and low unemployment…

January 31, 2019

A two-part series by  Kevin L. Kliesen of St Louis Fed.

The first part presents the original Taylor Rule which shows that Fed Funds rate should be much higher than it is today:


MIT Faculty Skit: Robert Solow as the 2000 year old economist

January 31, 2019

Fun bit from Irwin Collier who continues to dig into archives of economics departments:

A skit in economics typically involves a humor transplant of some sort. The following script from the faculty contribution to an annual M.I.T. economics skit party (ca.  late-1970s?) took its inspiration from  two greats in American comedy, Carl Reiner & Mel Brooks, who sometimes performed as interviewer and 2,000 year-old man, respectively.

While it is fairly clear that Robert Solow performed and probably wrote the entire skit, the identity of the interviewer still needs to be established. Hint: there is a comment box at the bottom of this post. 

The script comes from a file of such Solovian skits that Roger Backhouse has copied during his archival research and has shared with Economics in the Rear-View Mirror.

Sample this:

Q: Let’s come to your recent impressions. What do you see as the most important recent development in economics?

A: That’s easy – the increase in the mandatory retirement age to 70. Of course it’s got a long way to go before it does me any good, but I underestimate the DRI Mandatory Retirement Age Monitor estimates the retirement age to be rising at 1.73 years per year, so time is on my side.

Q: Apart from its effects on you personally, why do you think this is an important development?

A: It saves a lot of time at department meetings never to have to make a tenure appointment again. And you know what department meetings are like – even worse than skit parties.

Q: How do you think the change will affect students?

A: They’ll love it. Courses will be the same year after year. Reading lists will never change. Textbooks will go on and on and on. Can you imagine the 200th edition of Dornbusch and Fischer? I hope it’s printed on better paper than the low-grade papyrus of the first edition… I do wonder about Eckaus and that Sphinx…… Exams will be the same year after year. Students hate change. Look at what happened when you fellows tried to change 14.121 this year.

Q: Turning to economic theory, what has been the most important development you have witnessed in the last 2000 years?

A: The two-dimensional diagram.

Q: Be serious.

A: I am serious. Can you imagine Bhagwati, the Picasso of the Production Possibility Locus, trying to fit all those curves in a one-dimensional diagram, which was all we had in the old days? There wasn’t hardly room for anything besides the axis.

Q: Come, come. Bhagwati would find a solution for that little difficulty. Who needs an axis?

A: Maybe so, but can you imagine four-color one-dimensional diagrams? How could we have expensive textbooks without four-color diagrams? How could we have expensive professors without expensive textbooks? How could……

Q: OK, OK. What is the second most important development in economic theory in your lifetime?

A: The subscript.

Q: Don’t you know the difference between trivia and serious economic theory?

A: Sure. Trivia are worth remembering, but serious economics is OK to forget.

Q: Maybe we better stick to trivia…

A: I was just kidding. I really know the answer. There is no difference between trivia and serious economic theory.


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