Archive for June, 2020

Why didn’t Gandhi pay much attention to Spanish Flu?

June 29, 2020

There is little doubt that Spanish Flu for all its severity has missed most history books. The Flu occurred during the momentous period of WWI and added to the ongoing tragedy in world history in terms of lost lives and tarnished families. Yet, it barely features in historical discussions.

Thomas Weber of La Trobe University and Dennis Dalton of Barnard College add to this discussion in this interesting EPW paper. They look at Mahatma Gandhi’s letters during the period to figure what was he thinking and writing during the pandemic. Despite his own family getting infected, Gandhi paid very little attention to pandemic:

When David Arnold urged historians in his 2018 paper to study the 1918 flu pandemic, he could not have known that only two years later his admonition would prove so relevant to the COVID-19 catastrophe. Suddenly the media features lessons to be learned from this “forgotten” scourge of 1918 (Kolata 2020). Is there anything that can be learned from Gandhi’s less than expected ­involvement with the Spanish flu either about him personally or about his position of leadership in the nationalist movement?

As we have shown, Gandhi left the pandemic unmentioned in his public discourse at the time as well as in his Autobiography a decade later. Yet Gandhi, who was dealing with his own illness, was not alone among India’s foremost political leaders in this respect. Jawaharlal Nehru began his political career in 1916. When he recalled that crucial period ­after the war ended, he failed to note the 1918 pandemic in either his autobiography Toward Freedom (1958) or later in Discovery of India (1967).5 The omission in the latter is particularly curious. Nehru did present this moment in graphic detail by relating first the ­economic and psychological deprivation that India endured as a result of British imperialism. He pointedly includes the suffering among all strata of society, “the quagmire and defeatism” directly caused by colonialism. Then, this enigmatic comment:

And this process had eaten its way deep into the body and soul of India, poisoning every aspect of our corporate life, like that fell disease which consumes the tissues of the lungs and kills slowly but inevitably. Sometimes we thought that some swifter and more obvious process, resembling cholera or the bubonic plague, would have been better; but that was a passing thought… And then Gandhi came. (1967: 379)

A puzzling paradox—not only does Nehru miss reinforcing his case against the raj by referencing here the 1918 pandemic, but he implicitly wishes that the flu epidemic had happened without ­remembering that it did. The amnesia is total. And another irony worth noting is that like Nehru, Gandhi never associated the 1918 pandemic with the cost
of ­colonialism.

Where does this leave us? Regardless of Spinney’s assertions, it was not influenza but dysentery, exhaustion, what has been termed a “nervous breakdown,” and surgery for piles that took Gandhi’s mind off matters that would usually have been of fundamental importance to him, especially given that it had laid ashram members low and even lead to the death of close relatives. He more or less ignored the epidemic that was raging around him as Nehru, the British ­authorities in India, and historians of the Raj had done, but perhaps with more reason for doing so.



Conversation with Prof Govinda Rao on Indian Economy

June 29, 2020

The youtube recording of the conversation is here.

Prof Govinda Rao touched on several ailments facing Indian economy. It is going to be a long journey towards normalcy.

Conversation on Relevance of Business History with Lakshmi Subramanian

June 29, 2020

The conversation was last week.

The youtube recording is here.

Prof Lakshmi made several interesting points in the conversation. Most people agree that business history is highly relevant but continue to struggle to teach the subject formally in business/management education.  We have to somehow name the subject differently or weave history in the other subjects.

What are tech clusters and how do they function?

June 29, 2020

William R. Kerr and Frédéric Robert-Nicoud in this NBER paper:

Tech clusters like Silicon Valley play a central role for modern innovation, business competitiveness, and economic performance. This paper reviews what constitutes a tech cluster, how they function internally, and the degree to which policy makers can purposefully foster them.

We describe the growing influence of advanced technologies for businesses outside of traditional tech fields, the strains and backlash that tech clusters are experiencing, and emerging research questions for theory and empirical work.


Designing a CBDC for universal access

June 29, 2020

Bank of Canada researchers – John Miedema, Cyrus Minwalla, Martine Warren, Dinesh Shah – in this staff note lay conditions for a universal access for CBDC.

They speak about the need to store CBDC in a dedicated universal access device (UAD):

  • A CBDC should be as accessible as cash. A CBDC is a digital product that can be designed to include many of the attributes of cash (e.g., ease of use, portability, offline function). Using a CBDC should be a positive and inclusive experience—from acquiring it, to using it in transactions, to being assisted by its support services.
  • Multiple formats for a CBDC can embody the design principles of universal access. The Bank is exploring multiple formats for a CBDC, including conventional online and mobile technologies, as well as custom devices and deviceless solutions. We will consult widely with stakeholders and users on these options.
  • A CBDC could be used through a dedicated universal access device (UAD). One potential concept the Bank is investigating is a custom device that is engineered for universal access while securely storing and transferring a CBDC. The device could incorporate attributes of cash and take advantage of specialized technologies. Such a device should be manufactured at a low cost and issued by the Bank to ensure maximum inclusion.
  • A UAD could be resilient in ways that a smartphone is not. A UAD could embed a local, secure store of value, be network-independent and operate for long periods on a local power source. If there is an infrastructure failure, a UAD may prevent the interruption of digital transactions.

UAD could resemble a pager kind of device. Central Banks could also be looking to set up a wireless company where these transactions could be facilitated.

Interesting to see how researchers are thinking through a merger of benefits of physical cash and today’s technologies while designing a CBDC.

The Role of ICT in the Evolution of U.S. and European Productivity Growth (1977-2015)

June 29, 2020

Robert J. Gordon and Hassan Sayed in this new NBER WP:

We examine the role of the ICT revolution in driving productivity growth behavior for the United States and an aggregate of ten Western European nations (the EU-10) from 1977 to 2015. We find that the standard growth accounting approach is deficient when it separates sources of growth between ICT capital deepening and TFP growth, because much of the effect of the ICT revolution was channeled through spillovers to TFP growth rather than being limited to the capital deepening pathway. Using industry-level data from EU KLEMS, we find that most of the 1995-2005 U.S. productivity growth revival was driven by ICT-intensive industries producing market services and computer hardware.

In contrast the EU-10 experienced a 1995-2005 growth slowdown due to a paucity of ICT investment, a failure to capture the efficiency benefits of ICT, and performance shortfalls in specific industries including ICT production, finance-insurance, retail-wholesale, and agriculture.

After 2005 both the U.S. and the EU-10 suffered a growth slowdown, indicating that the benefits of the ICT revolution were temporary rather than providing a new permanent era of faster productivity growth. This joint transatlantic post-2005 slowdown is consistent with the broader view that ongoing innovation has been less potent in boosting productivity growth compared to earlier decades of the postwar era.


Bank of Korea’s 70th anniversary

June 29, 2020

Bank of Korea was established on 12 June 1950.

The current Central Bank Governor Lee Juyol gave a speech on the anniversary He rightly says this is not the time to self-congratulate:

Today is the 70th anniversary of the Bank of Korea’s establishment. I wish to express my sincere gratitude to our predecessors who devoted themselves to the development of the Bank of Korea and our economy, and to the many people who have supported and encouraged the Bank. I would like to say in addition how much I appreciate the efforts of all members of our staff, who are unwaveringly fulfilling the duties entrusted to them in their positions at a time when our working environment has been dramatically altered by the unprecedented coronavirus pandemic.

Looking back, the Bank of Korea has faithfully carried out its role as a central bank since its foundation in 1950, while making all-out efforts to meet the demands of the times. In the initial stage of economic development, our Bank spared no support as Korea achieved high-speed industrialization-led growth that was the wonder of the world. After experiencing high rates of inflation due to two oil shocks, our Bank devoted its attention to establishing a foundation for price stability. Since the global financial crisis, we have actively carried out our financial stability mandate. All of these efforts have not only provided stepping stones for economic development and stability, but have also laid a foundation for our standing as a central bank to be firmly established.

Commemorating our anniversary today, I see no lack of achievements to celebrate from the past 70 years. But as our economy experiences severe hardship due to the COVID-19 pandemic, now is not the time to congratulate ourselves.


Riksbank giving opportunity to redeem banknotes which became invalid during changeover in 2015-17

June 26, 2020

Riksbank announced a changeover from old banknotes to new banknotes in the period 2015-17.

92% of the notes came back and 8% (worth SEK 5.5 billion) did not come back to the central bank. The central bank allows to convert old notes to new notes for a fee. This fee will be doubled from Oct-2020 onwards:

During the banknote changeover 2015–2017, banknotes worth a total of SEK 88 billion became invalid. 92 per cent of these have returned to the Riksbank, but there are still banknotes missing, amounting to a total value of SEK 5.5 billion. You could buy 10 tonnes of gold for this amount, around 830 bars of gold. If all of the banknotes were laid out in a row next to one another they would stretch as far as 175 marathon races, or 7,400 kilometres.

There is always a possibility to redeem invalid banknotes at the Riksbank. However, for invalid banknotes sent in after 1 October the administration fee will be raised from the current SEK 100 to SEK 200 per case. In recent years, the Riksbank has redeemed 99 per cent of the cases sent in. Further information on how to redeem invalid banknotes can be found on our website.

On 1 October the regulations for redeeming invalid banknotes will also be changed so that only the person who owned the banknotes when they became invalid, or estates of deceased persons, will have the right to redeem the notes. This change means that invalid banknotes that have been sold, gifted, or donated to charity can no longer be redeemed.


The covid pandemic ought to shake up the field of economics

June 26, 2020

Kaushik Basu in this Project Syndicate piece (republished in Mint) writes on the need for change in field of economics. He says the crisis has exposed the notion of central role of markets in efficient functioning of the economy

…..a disruption such as the one caused by covid-19 reminds us how much we take for granted. I realized this during the nearly three months I spent in Mumbai during the lockdown, when family and friends told me of conflicts, showdowns and frayed nerves in the city.

Whereas some residents were castigated for not wearing face masks or for violating social-distancing norms, others were criticized for overdoing the lockdown. Some residents’ associations photographed anyone who stepped out of their home, even if they were alone and far away from anyone else, arguing that such behaviour was irresponsible. Because the behavioural requirements brought about by the pandemic are novel and have yet to stabilize, we are more aware of them than we are of longer-established social norms.

Markets also rely on such norms, most of which, having evolved over time and become routine, lie beyond economists’ explicit assumptions. As Karl Polanyi, Mark Granovetter, and others have argued, the economy cannot be understood as though it stands apart from society. Certain social and institutional preconditions must be present for an economy to function effectively. But the economics profession widely overlooked these important reminders, or, at best, put them aside with a nod.

In my book Beyond the Invisible Hand, I argued that trade and exchange depend not only on technical assumptions of which all economists are aware, such as the law of diminishing marginal utility, but also on other conditions that we take for granted. These include being able to trust one another and our ability to communicate, which allows us to negotiate and conclude deals. But no economist writes down “can talk” as an assumption. It is regarded as a given.

So many such pieces were written post-2008 crisis as well. But little changed. Will the current crisis lead to the changes?

Tracking impact of central banks policies on market fear as implied by options prices

June 26, 2020

Miguel Ampudia, Ursel Baumann and Fabio Fornari of ECB look at option prices to track impact of central bank policies on market fear . The policies have helped curb

An indicator of investor risk preferences or risk aversion can be derived by comparing the risk-neutral density with an estimate of the physical density of equity returns. The risk-neutral and the physical densities are related to each other through the pricing kernel, which embeds investors’ risk preferences. The physical density represents investors’ best judgement about probabilities of future price developments. Expectations of physical densities cannot be determined from market prices, as market prices also embed the risk preferences of investors. Researchers have turned to statistical methods to estimate such densities.[5] We use a daily multivariate generalised autoregressive conditional heteroscedasticity (GARCH) model to achieve this.[6]

The tail risk aversion indicator is constructed by comparing the left tails of the risk-neutral and physical distributions. Investors are risk-averse if they attach a higher risk-neutral probability to adverse events compared with the physical density. As tail risk-averse investors are willing to pay a premium to insure against the disutility associated with adverse outcomes, risk-neutral probabilities will overstate the corresponding physical probabilities for negative tail events. We look at the behaviour of the left tails of both the risk-neutral and the physical densities for equity returns over a three-month horizon. The index of aversion to negative tail risk of investors is calculated as the area to the left of the point on the risk-neutral density that corresponds to the lowest tenth percentile of the physical distribution of the returns (normalised by 0.1, i.e. the corresponding area on the physical density).[7] A tail risk aversion index above one indicates that investors fear the materialisation of negative tail events and are therefore willing to insure against such an occurrence by paying more than would be justified by its historical likelihood.[8] By contrast, an index value between zero and one could be considered as consistent with a situation in which appetite for risk is high.

Chart C

Euro Stoxx 50 tail risk aversion indicator and tail risk

For options with a horizon of 10 to 20 days ahead


Sources: Authors’ calculations and Refinitiv.
Notes: “APP” stands for asset purchase programme and “APP extension” refers to the ECB measures announced on 12 March 2020, “PEPP” stands for the pandemic emergency purchase programme announced on 18 March 2020, “QE” stands for quantitative easing and “VaR” stands for value at risk (tenth percentile). The latest observations are for 13 April 2020.

The estimated tail risk aversion increased measurably from the second half of February. In mid-March, coinciding with the introduction of policy measures on both sides of the Atlantic, it reversed its course and returned to early-February levels. Chart C depicts the estimated tail risk indicator, along with a measure of tail risk, defined as the (inverted) tenth percentile of the physical distribution of the Euro Stoxx 50 returns. Initially, as the coronavirus was largely contained to certain regions in China, markets appear to have been rather complacent in the sense that there was practically no increase in tail risk aversion. At the outbreak of the pandemic in Europe, however, investors’ willingness to take on risk declined measurably, as reflected in the increase in the tail risk aversion index as of 21 February – the start of the lockdown in some parts of the Italian region of Lombardy. Around mid-March, the price of left tail risk started to decline again, as a cascade of fiscal and monetary policy measures was announced on both sides of the Atlantic. By contrast, tail risk itself remained broadly stable until the beginning of March, started to rise significantly thereafter and remained elevated even after the introduction of policy stimulus. One interpretation of these developments is that the measures put into place by central banks and governments have been able to support investors’ risk appetite, thus curbing the initial rise in the price of risk and leading it back to the value prevailing around mid-February. This reduction in the price of risk took place despite the rise in the amount of risk and therefore contributed significantly to minimising the impact of the shock on financial markets.

How Europe is taking another page from US financial history..

June 25, 2020

Interesting piece from Jacob Funk Kirkegaard of PIIE.

He points how Europe is taking a leaf from US financial history in 1913. US government until relied on revenues from customs and other sources. In 1913 US started income tax which became a significant source of state financing. Europe is at similar juncture now and gradually looking to raise revenues from other sources:

Enter the US history books and the enactment of the 16th Amendment to the US Constitution in 1913, which enabled progressive personal income taxation to be levied at the federal government level for the first time.[2] The tax, which had previously been enacted and declared unconstitutional in the 1890s, enabled the federal government to finance its participation in world wars and the New Deal, establishing the modern federal government era in the United States. Prior to 1913 (apart from a brief period during and after the Civil War), the most important sources of US federal government revenues were not income or consumption taxes, but high tariffs on imports; “sin taxes” on spirits, tobacco, and wine; and a modest tax on corporations in the early 20th century.

The European Commission has proposed a new set of own resources similar to the revenue sources the US federal government had prior to 1913. It suggests raising an additional €10 billion from expanding the carbon emissions trading system (i.e. a 21st century climate “sin tax”), €5 billion to €14 billion from a new EU carbon border adjustment mechanism (i.e. a 21st century trade tariff), €10 billion from a new EU level corporate tax on multinational corporations operating across the EU internal market, and €1.3 billion in new revenue from a digital tax on large firms operating in Europe. These levies would, combined with the €20 billion already collected in traditional tariffs, increase European-wide resources to just over €50 billion,[3] or 0.4 percent of EU27 gross national income. Figure 1 compares the breakdown of these new EU traditional own resources with the financing of the pre-1913 US federal budget.

Proposed EU revenue sources resemble US federal government revenue streams prior to 1913

Tariffs and carbon border adjustment would thus comprise 60 percent of the EU’s new proposed traditional own resources, in line with how trade tariffs were the largest source of income for the US federal government pre-1913. About 20 percent of the EU’s new revenues would be “carbon sin taxes,” taking the total foreign import + sin tax revenues to 80 percent of the new traditional own resources total, not far off from the historical US pre-1913 level of roughly 90 percent of total federal government revenues from these two sources.[4] The rest of the EU’s new proposed traditional own resources would be variations of corporate taxes, also in line with this category being the third largest revenue source for the US federal budget in the early 20th century until the passage of the 16th Amendment.

Europe is thus following the example of the early US federal government prior to the 16th Amendment in raising its direct revenue from limited tax sources. Until that changes, member states will remain fiscally dominant in Europe, and the EU will not take over any additional redistributive tasks.


Thinking about Security issues while designing a Central Bank Digital Currency

June 25, 2020

Cyrus Minwalla of Bank of Canada writes on the need to look at several security issues while designing a CBDC.

This paper explores the security aspects involved in constructing and deploying a central bank digital currency (CBDC). Security is an essential quality of a CBDC system. In addition to securing the underlying storage and transfer of value, security involves aspects of privacy and resilience. Threats must be mitigated to protect the integrity of funds and the confidentiality of users. A secure CBDC system will retain public trust in the central bank.

See the references in the paper. So many on technology.

RBI cautions Banks and NBFCs for sourcing loans by over Digital Lending Platforms

June 25, 2020

RBI issued a notification yday saying it is welcome that banks/NBFCs have tied up with digital platforms to give loans. However, this does not imply that banks are free from following lending guidelines. Infact, they have to be doubly watchful:

It has been observed that many digital platforms have emerged in the financial sector claiming to offer hassle free loans to retail individuals, small traders, and other borrowers. Banks and NBFCs are also seen to be engaging digital platforms to provide loans to their customers. In addition, some NBFCs have been registered with Reserve Bank as ‘digital-only’ lending entities while some NBFCs are registered to work both on digital and brick-mortar channels of credit delivery. Thus banks and NBFCs are observed to lend either directly through their own digital platforms or through a digital lending platform under an outsourcing arrangement.

2. It has further been observed that the lending platforms tend to portray themselves as lenders without disclosing the name of the bank/ NBFC at the backend, as a consequence of which, customers are not able to access grievance redressal avenues available under the regulatory framework. Of late, there are several complaints against the lending platforms which primarily relate to exorbitant interest rates, non-transparent methods to calculate interest, harsh recovery measures, unauthorised use of personal data and bad behavior.

3. Although digital delivery in credit intermediation is a welcome development, concerns emanate from non-transparency of transactions and violation of extant guidelines on outsourcing of financial services and Fair Practices Code, etc. issued to banks and NBFCs, a reference to which is drawn in the Annex. It is, therefore, reiterated that banks and NBFCs, irrespective of whether they lend through their own digital lending platform or through an outsourced lending platform, must adhere to the Fair Practices Code guidelines in letter and spirit. They must also meticulously follow regulatory instructions on outsourcing of financial services and IT services.

4. It must be noted that outsourcing of any activity by banks/ NBFCs does not diminish their obligations, as the onus of compliance with regulatory instructions rests solely with them. Wherever banks and NBFCs engage digital lending platforms as their agents to source borrowers and/ or to recover dues, they must follow the following instructions:

a) Names of digital lending platforms engaged as agents shall be disclosed on the website of banks/ NBFCs.

b) Digital lending platforms engaged as agents shall be directed to disclose upfront to the customer, the name of the bank/ NBFC on whose behalf they are interacting with him.

c) Immediately after sanction but before execution of the loan agreement, the sanction letter shall be issued to the borrower on the letter head of the bank/ NBFC concerned.

d) A copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement shall be furnished to all borrowers at the time of sanction/ disbursement of loans.

e) Effective oversight and monitoring shall be ensured over the digital lending platforms engaged by the banks/ NBFCs.

f) Adequate efforts shall be made towards creation of awareness about the grievance redressal mechanism.

5. Any violation in this regard by banks and NBFCs (including NBFCs registered to operate on ‘digital-only’ or on digital and brick-mortar channels of delivery of credit) will be viewed seriously.

Podcast: The evolving role of Swift in global payment systems

June 25, 2020

Technology is becoming more and more integral to finance and payments. One cannot understand financial systems without understanding technology. Sample this from a OMFIF podcast on Swift payment system:

Swift plays a vital role moving money around, acting as a lifeline for trade and economic activity. Michael Moon, Swift’s managing director of payments and trade, joins Bhavin Patel, senior economist and head of fintech research at OMFIF, to discuss how Swift’s role in global payment systems is changing as payments become increasingly digitised and amid greater innovation in the financial infrastructure. Further topics include the introduction of Swift gpi and the ISO 20022 standards, and correspondent banking during a time of derisking.

ISO 20022 means:

It describes a common platform for the development of messages using:

  • a modelling methodology to capture in a syntax-independent way financial business areas, business transactions and associated message flows
  • a central dictionary of business items used in financial communications
  • a set of XML and ASN.1 design rules to convert the message models into XML or ASN.1 schemas, whenever the use of the ISO 20022 XML or ASN.1-based syntax is preferred

Swift GPI details here..

Central Bank of Belgium analyses Modern Monetary Theory (MMT)

June 24, 2020

M. Kasongo Kashama of Central Bank of Belgium (called as National Bank of Belgium) in this paper reviews MMT:

Modern monetary theory (MMT) is a so-called heterodox economic school of thought which argues that elected governments should raise funds by issuing money to the maximum extent to implement the policies they deem necessary. Over the last few years, it has been supported by political representatives, for whom MMT has provided a rationale for their calls for Green New Deals and other large public spending programmes. Most recently, it has also found an echo in calls for bold post-COVID-19 recovery plans. But it also came under increased scrutiny and fire from the mainstream economic world.

This article seeks to understand modern monetary theory (MMT) using six frequently asked questions.

What exactly is MMT all about? The MMT doctrine suggests shifting to a regime where the government finances its spending programmes by issuing base money, to achieve full employment. Should inflationary risks emerge, it is expected to raise taxes. The job of the central bank (if any) boils down to accommodating the needs of the government.

How do MMT’s theoretical foundations compare with the consensus approach? The MMT doctrine relies on an unconventional approach for its assignment of macroeconomic policies to the macroeconomic stabilisation targets: the government (through fiscal policy) must tackle the joint full employment price stability objective, while the central bank (through monetary policy) deals with debt sustainability. Under the consensus approach, it is the other way around: monetary dominance prevails. In theory and assuming both these policy‑makers deliver on their mandates by appropriately deploying their respective instruments, both approaches should put the macroeconomy on track to equilibrium.

Is MMT workable in practice? There is some indication that the MMT doctrine may face practical limitations. Elected governments are typically associated with commitment problems, because they have incentives to push the economy beyond its productive capacity/full employment. And as the government commitment to the joint objective of full employment and price stability can be perceived not to be credible, it is more likely that people’s inflation expectations are not well anchored.

Why has MMT been so popular in recent years? The low inflation context of the last few years might suggest that the inflationary risks induced by expansionary fiscal policies are limited. And the low interest rate environment points to contained servicing costs for the sovereign debt. But MMT’s appeal might rely too much on the persistence of such low inflation and low interest rates.

How does MMT compare with the Eurosystem’s asset purchase programmes (APP and PEPP)?

Asset purchase programmes and MMT both aim at stabilising the economy. But their approaches differ. While the asset purchase programmes seek to lower longer-term rates to ensure easy funding conditions for the whole economy until the economy takes off again, MMT concentrates solely on providing the government with ample and cheap financing on a permanent basis.

Is a temporary switch to MMT principles realistic in the euro area in the COVID-19 crisis context? The recent increased need for further fiscal support in the midst of the COVID-19 crisis justifies an in-depth reflection about the appropriate monetary-fiscal policy mix to support a fast and sound economic recovery. Doing so does not mean that monetary dominance should be abandoned, and MMT recipes taken on board. Avoiding being perceived as opening the MMT Pandora’s box is key: that will minimise the risk of having to make a painful choice between high inflation and severe fiscal consolidation in the (distant) future.

Interesting to see a central bank researcher trying to figure MMT.

Will digital payments enable Cambodians settle transactions in their home currency Riel?

June 24, 2020

Cambodia is largely a dollarised economy but they also have their home currency Riel in circulation.

In this OMFIF interview Serey Chea, director general of the National Bank of Cambodia speaks on digital payments in the country. Serey expects that digi payments might lead to people transacting in Riel over US Dollar:


Conversation with Prof Lakshmi Subramanian: Relevance of Business History for Management Education

June 23, 2020

This weekend is a double bonanza. Following conversation with Prof Govinda Rao on Indian economy, we have another one with Prof Lakshmi Subramanian on relevance of Business History. One can register here for the Business History one.

Business History, as a discipline, has been taught in some business schools since the 1970s. However, it has only recently become more common in the curriculum in management schools across the world. A course in Business History attempts to bridge the gap between management studies and humanities, enabling an interdisciplinary approach to business studies.

In this webinar, we will discuss the following questions: What is business history? Why is it relevant for management education in India? How should we teach it? What can history teach us about business management in the contemporary world? The webinar will be of interest to students and educators in management and history.

Business history is vitally important to understand economic history and developments. However, it is hardly taught despite having multiple MBA institutes in India. Ahmedabad University is a rare place where we teach Business History .

Do log in to understand what entails business history and what we can learn from a really interesting subject.

Conversation with Prof M. Govinda Rao: COVID-19 Crisis and Response by the Indian Government

June 23, 2020

The conversation with Prof M. Govinda Rao is on June 26, 2020 at 5:00 pm. One can register here.

The unprecedented COVID-19 crisis has severely impacted the economy leading to losses in both lives and livelihoods. In order to counter the downturn, the Indian Government came up with a fiscal stimulus worth Rs 20 lakh crore (10% of GDP) to support agriculture, industry, MSME, labourers,etc.

However, the stimulus has raised more questions than answers. Some economists say that the actual scale of the stimulus is much smaller in magnitude and questioned its effectiveness to revive the Indian economy. Others have raised concerns over sources of financing the stimulus and add the burden lies with the already ailing banking system. The crisis has also raised questions over the relationships between Central and State Governments.

There cannot be a better person than Prof Govinda Rao to answer these questions given his wide experience in India’s policymaking and research. He has written on these topics extensively. The Conversation series invites all students of economics and those interested in economics to join us in what promises to be a fascinating discussion.

Why European Citizens’ trust the euro but not as much the ECB?

June 23, 2020

Stephanie Bergbauer, Nils Hernborg, Jean-François Jamet, Eric Persson and Hanni Schölermann in ECB’s Eco Bulletin analyse citizens trust in ECB and Euro. European trust Euro but not the ECB:


How will introduction of central bank digital currency impact the seignorage of central bank?

June 23, 2020

Peter Gustafsson and Björn Lagerwall of Riksbank analyse this question from Sweden’s perspective:

Seigniorage has historically been an important source of profits for the Riksbank. In recent years, the use of cash in Sweden has declined rapidly,and a future possibly cashless society could have important consequences for the Riksbank’s financial independence. This article contains a discussion and some numerical examples of how the introduction of an e-krona could affect the Riksbank’s ability to generate profits. Several factors affect the results: whether the e-krona would be regarded as a substitute for cash or bank deposits, how high the demand for the e-krona would be, and the level of the interest rate. As a final part of this article, we address the question of how high the demand for an e-krona would have to be to cover the Riksbank’s current expenses.

Nicely explained using the balance-sheet approach..

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