Archive for September 5th, 2019

The Origins Of The Great Indian Bank Merger

September 5, 2019

In the last 2 years, the number of public sector banks have been brought down from 27 to 12. First SBI merged the 5 State Associate Banks and Mahil Bank. Recently, the 10 banks were merged into 4 banks.

My BQ piece on the history of the 10 banks that were merged recently.

Central Banking’s Bankrupt Narrative: Philips Curve

September 5, 2019

Roger Farmer of UCLA in this Proj Syndicate piece:

The standard theoretical narrative is based entirely on the Phillips curve, which asserts a direct tradeoff between inflation and unemployment. This is the narrative that determines what research is allowed into the top economic journals, and which discussions take place in policy meetings at central banks around the world. It is the narrative that informs how everyone from journalists and academics to the wider public interpret monetary-policy decisions. But it is a misleading narrative, one from which we must escape if we are to improve how we manage modern market economies.

To that end, it is not enough to criticize the Phillips curve. If the theory is wrong, it must be replaced with something better, and by something other than a return to 1950s Keynesianism, as today’s critics of neoclassical macroeconomic theory seem to propose. According to Summers and Stansbury, government should “promote demand through fiscal policies and other means” (emphasis mine). While I agree that monetary policy will be impotent when Europe or the US enters another recession, I am not convinced that government spending is the right response. My own research provides empirical evidence that recessions are caused by crashes in asset markets. As such, it is better to stabilize asset prices than build bridges to nowhere.

Modern market-based societies have pulled more human beings out of abject poverty than any other known form of economic organization. But “capitalism” is not some monolithic structure that exists in contradiction to “socialism.” There is a continuum of alternative economic arrangements, with laissez-faire at one end and central planning at the other. Our goal should be to design institutions that take maximum advantage of the market as a mechanism for coordinating information, while also providing the tracks on which the market runs.

The curious case of Lloyd Mints, Milton Friedman, and the emergence of monetarism

September 5, 2019

Harris Dellas and George Tavlas  in this voxeu post points to ignored role of Lloyd Mints in developing monetarism:

Maestro Khayyam and the Raaga Pahadi

September 5, 2019

Siraj Khan pays a tribute to Music maestro Khayyam who passed away recently.

Khayyam saab composed quite a few his songs based on Raaga Pahadi and converted it into soulful music..

There is no parallel to his music..

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