BUSINESS
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
BUSINESS
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
BUSINESS
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
BUSINESS
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
BUSINESS
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
BUSINESS
Competing thoughts on the economy of competition
Governments are clamping down on oligopolies in a bid to infuse competition. But is competition always better?
BUSINESS
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
BUSINESS
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
BUSINESS
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
TRENDS
Can cryptocurrencies unseat modern money?
The growing utilization of cryptocurrencies has led to fears that they may replace modern money as legal tender
BUSINESS
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
BUSINESS
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
BUSINESS
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
BUSINESS
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
BUSINESS
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
BUSINESS
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
BUSINESS
Global low interest rates? Here are some macroeconomic perspectives
Modern Monetary Theory has a better explanation of fiscal and monetary policy than mainstream economics
BUSINESS
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
BUSINESS
When connected lending led to bank failures
As experts and policymakers engage in debate and discussion over the new guidelines set by RBI’s Internal Working Group, it is interesting to go back in history when connected lending led to bank failures
BUSINESS
Modern money theory and lessons from Japan
A critique of mainstream macroeconomics through the Japanese case should not be taken to imply that MMT advocates the same policy prescription for all situations; such naïve logic is a common weapon that macroeconomists often use against MMT
BUSINESS
The importance of appreciating the essence of banking
In order to deconstruct banking, we begin with the term deposit. Do banks take ‘deposits’? No
BUSINESS
An MMT perspective of the GST shortfall quandary
The MMT unequivocally asserts that an economically sovereign government which issues its own fiat currency does not face a solvency issue in its own currency. The same cannot be said for state governments or municipalities, which are more like the private sector in so far as they are users of currency
BUSINESS
What Modern Monetary Theory has to say about the US Fed’s change of strategy
Although the recent policy statement by Powell seems like a small victory for labour, MMTers have warned that the Fed is likely to revert to its old ways after the economic crisis unleashed by the pandemic abates
BUSINESS
MMT and helicopter money: A contrived association
Critics do not realise that bond sales and purchases are a monetary policy operation and not a method of funding fiscal deficits whether with self-imposed budgetary constraints or infamous helicopter money drops by the government
