Archive for July 29th, 2019

Are some dictators more attractive to foreign investors?

July 29, 2019

Abel François, Sophie Panel and Laurent Weill in this Bank of Finland working paper:

Since political uncertainty is greater in dictatorships than in democracies, we test the hypothesis that foreign investors scrutinize public information on dictators to assess this risk. In particular, we assume they use five suitable dictators’ characteristics: age, political experience, education level, education in economics, and prior experience in business. We perform fixed effects estimations on an unbalanced panel of 100 dictatorial countries from 1973 to 2008 to explain foreign direct investment (FDI) inflows.

We find that educated dictators are more attractive to foreign investors. We obtain strong evidence that greater educational attainment of the leader is associated with higher FDI. We also find evidence that the leader having received education in economics and prior experience in business is associated with greater FDI. By contrast, the leader’s age, and political experience have no relationship with FDI. Our results are robust to several tests and checks, including a comparison with democracies.



Who are you going to believe, experts or the evidence of your own eyes?

July 29, 2019

What happens when experts such as Joseph Stiglitz begin doubt experts?

He along with Martine Durand and Jean-Paul Fitoussi write in

Autumn of the matriarch: Women in their 90s and 100s are scripting stories of resilience and cheer in Kerala

July 29, 2019

One keeps hearing terrible stories regarding State of women and girl child in the country. There has to be zero tolerance towards this ongoing nonsense.

Given the doom there are some bloom stories as well. P. Anima has a piece in Hindu which raises goose-pimples and makes one so proud. It tells the stories of these women in 90s and 100s which will give today’s millennials a run for money:

From leading a political party at the age of 100 to learning to write at 97, Kerala’s nonagenarian and centenarian women are scripting plucky stories by doggedly keep pace with life despite crushing personal losses

Read the whole piece and say wow, Cheers to their spirit.
This story in particular of Karthiyayani Amma wanting to study at 97 is quite something:


Why did central banks continue to maintain gold reserves after Bretton Woods?

July 29, 2019

Interesting paper by Eric Monnet (Banque de France) and Damien Puy (IMF):

Why did monetary authorities hold large gold reserves under Bretton Woods (1944–1971) when only the US had to? We argue that gold holdings were driven by institutional memory and persistent habits of central bankers. Countries continued to back currency in circulation with gold reserves, following rules of the pre-WWII gold standard.

The longer an institution spent in the gold standard (and the older the policymakers), the stronger the correlation between gold reserves and currency. Since dollars and gold were not perfect substitutes, the Bretton Woods system never worked as expected.

Even after radical institutional change, history still shapes the decisions of policymakers.

Lots of monetary history in the paper..

115th Birth Anniversary of JRD Tata

July 29, 2019

Madras Courier pays a tribute to Mr JRD Tata on hos 115th Birth Anniversary.

Beware of digital promise

July 29, 2019

My piece over the weekend in Business Standard.

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