The government must adopt expansionary fiscal measures in Budget
A revival of strong growth will automatically check the deficit through higher tax collections
Lessons for India from the Turkish Lira crisis
The Turkish experience illustrates the repercussions of capital account convertibility on exchange rate volatility and imported inflation that completely obliterates any independence over fiscal and monetary policies
Who will be the new Chairperson of the US Fed?
Will US President Joe Biden extend the term of the present Chairperson Jerome Powell, or will he appoint Lael Brainard, a member of the Fed’s Board of Governors? This is not simply a choice between two economists, but a political choice between them and their deeper social and political convictions
The pros and cons of RBI’s massive build-up of forex reserves
Given the ample forex reserves for precautionary purposes, it can be inferred that accumulation of reserves is mostly to ensure that the rupee remains depreciated to sustain exports
Will cryptocurrencies replace gold as an asset?
Essentially, bitcoin and other cryptocurrencies are no different from gold, apart from the fact that central banks are yet to hold them in the reserves
The challenges in using monetary policy as a countercyclical strategy
Monetary easing may have helped the global economy escape the worst effects of COVID-19 but questions remain on the ability of interest rates to influence maximum employment with price stability
The Evergrande crisis illustrates real, financial impact of NPAs
While the immediate crisis may be averted, it is unlikely that it will vanish completely as long as real investments fail to yield returns
US faces a fiscal cliff: Crisis or farce?
The debate over whether the US debt ceiling needs to be raised will revive pernicious fears about fiscal deficits
Will China’s digital currency end US Dollar dominance?
Were the world to decide to shift their dollar reserves to any other currencies, the country likely to benefit most in terms of production of real output would be the US on account of a depreciating dollar
What does ‘using’ foreign exchange reserves for infrastructure spending mean?
When government spends, even when funded by utilization of dollar reserves, it essentially has the same effect on prices as deficit spending
The ideological origins of some numbers in economics
An inflation target of 2 per cent, a fiscal deficit target of 3 per cent and a public debt to GDP ratio of 60 per cent were all numbers plucked out of thin air
Competing thoughts on the economy of competition
Governments are clamping down on oligopolies in a bid to infuse competition. But is competition always better?
El Salvador’s Bitcoin experiment is not as disruptive as it may seem at first sight
The crucial question is the implication of the simultaneous circulation of two ‘assets’ – the dollar and Bitcoin – as a medium of exchange and as legal tender. Monetary history is actually replete with such situations
Central Bank Digital Currencies have a role to play in commercial banking, and how!
Governments and central banks may work symbiotically with commercial banks to challenge large tech, e-commerce and fintech companies as well as cryptocurrencies from dominating the payments settlement space
Central bank digital currency has its uses, but can it replace cryptocurrency?
CBDCs can provide an alternative to digital wallets and cryptocurrencies, but there are trade-offs to be considered
Can cryptocurrencies unseat modern money?
The growing utilization of cryptocurrencies has led to fears that they may replace modern money as legal tender
The war against COVID is on. This is how we can finance it
How the British financed World War 1 could provide clues on how to fund the war against the pandemic in India
Is a paradigm shift in macroeconomics imminent?
While Modern Monetary Theory has been embraced by the public and by policymakers, mainstream economic theory remains in thrall to obsolete ideas
Demystifying G-SAP with Modern Money Theory
By announcing a massive bond purchase programme, the G-SAP, the RBI assures infusion of enough liquidity (a swap of bonds for reserves) into the system before it will be drained out when it auctions new government bonds (a swap of reserves for bonds), thereby maintaining money markets rates within the target range
A Modern Monetary Theory view of the high taxes on petroleum products
Except for environmental benefits of disincentivising the consumption of fossil fuels, the imposition of a petroleum product tax is not only regressive in its impact but also seems to be defeating the essential fiscal purpose of taxation i.e. controlling inflation
A Modern Money Theory view of the Union Budget 2021
One of the important revelations in India and across the world this year is the critical role of fiscal policy and the misplaced paranoia over fiscal deficit target numbers
Do we need to change India’s flexible inflation targeting framework?
If low interest rates are not enough to revive growth, then the private sector will not really be able to kickstart the economy and the burden for growth will fall entirely on the government, until vaccination restores confidence
Global low interest rates? Here are some macroeconomic perspectives
Modern Monetary Theory has a better explanation of fiscal and monetary policy than mainstream economics
Year-ender 2020 | All debt is not the same
As the Budget announcement for 2021-22 draws closer, fear-filled discussions in the Indian media over deficits and debt numbers will be heard
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