Category Archives: General

Trump disregarding new normal

While it is sad to believe who can not grow forever, atleast in terms of economics, but it is hard reality. Ruchir Sharma offer his two-cents. His contention is that, at the time of Reagan productivity and population growth was both 1.75%, hence US could grow at 3.5%. With population growth declining and productivity at just .75% its hard to achieve purported 3-4% growth. This is the new normal and we all have to adjust to it.

 

How Modi govt lobbied Moody’s for ratings upgrade, but failed

Rating Agencies are major stake holder in international finance. No wonder they were identified as the prime culprit when global finance ran wild. The hallow institutions were tarnished. But not enough, I guess. Recent effort by Indian government to lobby one of the three  major rating agency.

Though it is highly unbecoming of Indian Govt to indulge in this, I guess the practice is quite widespread.

Independence of ECB

The cult of independence of Central Banker is not new. Central Banker over the world have worked hard for this independence. Whether FED or RBI we do hear how govt is trying to control the chairman/governor. The independence and the prominence attached to the person holding the chair is so overblown, that recently a report stating Dr Rajan refusing to continue for second term, has set panic among the Forex trader.

But asking more specific question-Independence from whom.

Government !!!!!!!!!!!!!

Peculiar case is of European Central Bank (ECB). It is not Central Banker to specific country. Not it get public support like its American or Indian counterparts can get. Yanis Varoufakis, former finance minister of Greece, present his analysis in Project-Syndicate. His analysis is colored by the events, he presided over as finance minister of Greece, but he does drives the point home that ECB  is vulnerable to creditors( read Germany). and there is so much ECB can do.

Prof. Eichengreen, points out that possibly Euro can never take the place of Dollar, because it is a currency without state. and too many committee are to be consulted for any decision.

 

 

GDP Debate

The debate on accuracy and validity of new series is far from over. The data released by RBI from MCA has put the debate on the blow up factor of small industry. This is one thing in sample approach- which is most tricky. But never the less good insight.