Patrick Chovanec has a fascinating article in ForeignAffairs, titled a href="http://www.foreignaffairs.com/articles/136963/patrick-chovanec/chinas-real-estate-bubble-may-have-just-popped?page=show">China'sReal Estate Bubble May Have Just Popped. This is interestingand important from two points of view./aFirst, bad news for China is bad news for the world economy. We arealready in a bleak environment, with difficulties in Europe, Japan,the US, and India. It will not be pretty if China runs into trouble aswell. I am reminded of the feeling of...
Saturday, 24 December 2011
Friday, 16 December 2011
The most-read posts on this blog
Posted on 13:39 by Unknown
Google started maintaining data about blogs from May 2009 onwards. In this data, I find the most read posts were:The Right to Education Act: A critique, by Parth ShahWhat in the world is happening to the rupee?The rupee: Frequently asked questionsWhen and where do great feats of architecture come about?Guide to the Eurozone crisis, by Percy MistryThe US sells chopsticks to China, by Jim HansonHousehold financial choice of the hapless households of IndiaDon't like the SKS valuation? Compete, don't complain, by Bindu Ananth and Nachiket M...
Thursday, 15 December 2011
RBI reaches for capital controls
Posted on 08:21 by Unknown
By and large, I have felt that RBI has done a pretty good job of the exchange rate. They doubled currency flexibility twice, in 2004 and 2007. In 2009, they shifted to a floating rate. There were two problems:They continue to sometimes do tiny blocks of trading on the currency market. In a market of $70 billion a day, a small scale of trading (e.g. $1 billion a month) is irrelevant, so why bother doing it? This has been pointless, but it has done no damage.They have failed to correctly communicate to the market that the exchange rate is now a float....
Tuesday, 13 December 2011
Be skeptical. Be very skeptical.
Posted on 01:50 by Unknown
Mistake upon mistakeIn recent months, we've had a few slip-ups by the official statistical system in India:Yesterday's IIP release was preceded by a mistake. Mint says: On Monday, the government was guilty of a similar error in its factory output data. Till it corrected the number pertaining to capital goods output, analysts were left scrambling for explanations as to how this had grown 25.5% while overall factory growth had shrunk 5.1%. (The answer: it hadn’t, and had actually shrunk by 25.5%).On 9 December, we discovered there were important...
Sunday, 11 December 2011
Interesting readings
Posted on 12:13 by Unknown
China's Pakistan Conundrum by Evan A. Feigenbaum, in Foreign Affairs.The most important task of government is the public goods of law and order: laws, courts and judiciary. The first step towards strengthening these lies in sound measurement. Writing in Pragati, Sushant K. Singh has an excellent article on the problems of measurement of crime in India.An independent judiciary by Ruma Pal.Devesh Kapur, in the Business Standard, on the HR crisis in the Indian State.Shyam Saran in the Business Standard on a more sensible ...
Saturday, 10 December 2011
Business cycle conditions in India: It's mostly cycle, not trend
Posted on 09:16 by Unknown
There is a lot of gloom in India today about the broad-based failure of the UPA strategy of combining left-of-centre populism, fiscal profligacy, theft, and a lack of interest in the foundations of India's growth. We learn from history that we learn nothing from history; India has clearly learned very little from its escape from the Hindu rate of growth. The moment we got a little bit of growth, the old style socialism and theft reared up again. In one of the many pessimistic articles of this theme, Shekhar Gupta in the Indian Express says:What...
Friday, 2 December 2011
Talk by Thomas Laubach on inflation expectations, inflation targeting, monetary policy
Posted on 09:22 by Unknown
Thomas Laubach will do a talk titled Inflation: Expectations, Targets and the Institutional Framework for Monetary Policy at the NIPFP auditorium at 3:30 PM on December 9 (Friday). He is Professor at Goethe University in Germany. All are welco...
Thursday, 1 December 2011
The rupee: Frequently asked questions
Posted on 10:26 by Unknown
q: How big is the market for the rupee?The rupee is now a big market. Summing across both spot and derivatives, perhaps $30 billion a day of onshore trading and $40 billion of offshore trading takes place. Both these markets are tightly linked by arbitrage. In other words, for all practical purposes, it's like NSE and BSE which are a single market unified by arbitrage. If you place a small order to buy 100 shares on either NSE or BSE, you get essentially the same price, and arbitrageurs are constantly at work equalising the price across both markets....
Subscribe to:
Posts (Atom)