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A Suite of Approaches for Estimating Equilibrium Exchange Rates for India | Mostly Economics
Michael Debabrata Patra, Dhirendra Gajbhiye, Harendra Behera, Sujata Kundu and Rajas Saroy in RBI Bulletin Nov-24 : This article provides a comprehensive examination of India's equilibrium exchange rate through various approaches such as behavioural equilibrium exchange rate (BEER), permanent equilibrium exchange rate (PEER) and fundamental equilibrium exchange rate (FEER). It highlights the role of relative…
A bribery case of an Indian company bribing in India but investigated in US Courts? | Mostly Economics
U.S. Attorney's Office, Eastern District of New York has issued a damning charge against an Indian Billionaire Businessman and seven other Senior Business Executives. The charges are of bribing government officials to get business contracts. Securities Exchange COmmission, the US securities market regulator has also issued its own charge. One would imagine that the executives…
From ding dong to bleep bleep: promoting innovative retail payments markets in a fragmented world | Mostly Economics
Olaf Sleijpen of Netherlands Central Bank in this speech discusses the changing payment world: Some 35 years ago, when I was a student traveling through Europe on my summer holidays, I took traveler cheques with me. Everybody in the room knows what a cheque is? Although you had to purchase them for a fee, they…
A new concern for democracy: What if Trump keeps his promises? | Mostly Economics
Kaushik Basu raises an interesting point: In most democracies, the primary concern after an election is that the winners will fail to deliver on their campaign promises. The 2024 US presidential election is one of those rare instances where there is a palpable fear that the newly elected leader will actually follow through.
SBI Horniman Circle Celebrates 100 Years of Banking Legacy and SBI releases 5th volume of its history | Mostly Economics
SBI Horniman Circle branch celebrated 100 years of banking legacy. The bank also released its 5th volume of history for the period 1981-96. Honouring the rich legacy of the State Bank of India, the Honourable Minister of Finance and Corporate Affairs of India, Smt. Nirmala Sitharaman unveiled a specially minted ₹100 commemorative coin to mark…
The Central Banking Beauty Contest | Mostly Economics
Gonzalo Cisternas and Aaron Kolb in this NY Fed's LibertyStreet blogpost: Expectations can play a significant role in driving economic outcomes, with central banks factoring market sentiment into policy decisions and market participants forming their own assumptions about monetary policy. But how well do central banks understand the expectations of market participants—and vice versa? Our model,…
Political economy of fossil fuel subsidy removal: Evidence from Bolivia and Mexico | Mostly Economics
Mariza Montes de Oca Leon, Achim Hagen, Franziska Holz in this IMF paper: Is the removal of fuel subsidies as politically costly as many assume? Removing fossil fuel subsidies (FFS) is a compelling measure to fight climate change, as it improves public finances, reduces greenhouse gas emissions, and decreases local air pollutants (Sterner, 2007; Davis,…
The Great Moderation 20 years on – and beyond | Mostly Economics
Catherine L. Mann of Bank of England in this speech revisits debates on Great Moderation that started in 2004: In 2004, 20 years ago, a Federal Reserve Board Governor at the time, Ben Bernanke, gave a speech titled “The Great Moderation”. He outlined how, over the preceding 20 years, macroeconomic volatility had declined substantially and…
Demographic Differences in Letters of Recommendation for Economics Ph.D. Students | Mostly Economics
Interesting research by Beverly Hirtle and Anna Kovner: We analyze 6,400 letters of recommendation for more than 2,200 economics and finance Ph.D. graduates from 2018 to 2021. Letter text varies significantly by field of interest, with significantly less positive and shorter letters for Macroeconomics and Finance candidates. Letters for female and Black or Hispanic job…
Whither inflation targeting as a global monetary standard? | Mostly Economics
Claudio Borio of BIS in this speech asks the question: Whither inflation targeting as a global monetary standard? From its tentative beginnings, inflation targeting has spread to become the de facto global monetary standard. Historically, only the Gold Standard has had a longer lifespan. Inflation targeting has done its job: helping to hardwire a low-inflation…
100 Years of Glaxo Smithkline | Mostly Economics
Glaxo Smithkline is celebrating its 100th anniversary. It has released a coofeetable book on the occassion and also some details on its annual report. At the beginning of the century, when Joseph Nathan & Co, first made their wonderful dried milk for babies, they decided to give it a name ‘Lacto’ from Latin, lactis meaning…
Classifying supply shocks | Mostly Economics
Yesterday I had blogged about increasing prevalence of supply shocks in the economy. François Villeroy de Galhau, Governor of the Banque de France says not all supply shocks are alike and gives a cartography of supply shocks: These multiple supply-side shocks will have different implications for inflation. Adverse supply shocks, while usually contractionary, need not…
A Teacher Writes to Students Series (32): Tackling Monopoly Power | Mostly Economics
A Teacher Writes to Students Series (32): Tackling Monopoly Power Annavajhula J C Bose, PhD Department of Economics (Retd.), SRCC, DU In his Principles of Economics, Professor Mankiw concludes his discussion on what can be done to tackle the monopoly problem by opting for the solution of “doing nonthing” and points to this conclusion as…
Challenges in Financial Stability: Lessons from Minsky, Kindlberger and Bagehot | Mostly Economics
Very intersting speech by Andrew Bailey, Governor of Bank of England. He draws lessons from Minsky, Kindlberger and Bagehot on financial stability: I am going to use my time to talk about global financial stability and the challenges we face today. But I am going to start with some theory. The reason is that there…
Need for a new macro framework for rising cases of supply shocks? | Mostly Economics
Much of the macro policy framework is designed for demand shocks. Agnès Bénassy-Quéré, Second Deputy Governor of the Banque de France in this speech discusses how suuply shocks are rising and this requires rethinking on the fiscal-monetary policy framework: There is no consensus on the impact of climate change and the green transition on activity…
Regulator or researcher hat? The interconnectedness case | Mostly Economics
Chiara Scotti, Deputy Governor of the Bank of Italy in this interesting speech points to this dilemma of donning two hats: Researcher and regulator: My North Star in this journey of combining different hats into one is to have clear principles as a regulator and to try to think outside the box as a researcher.…
Quantitative Urban Economics | Mostly Economics
Stephen Rwdding reviews quant urban models: This paper reviews recent quantitative urban models. These models are sufficiently rich to capture observed features of the data, such as many asymmetric locations and a rich geography of the transport network. Yet these models remain sufficiently tractable as to permit an analytical characterization of their theoretical properties. With…
Politicians on corporate boards and the cost of public procurement | Mostly Economics
Bruno Baránek and Vitezslav Titl in this voxeu research explore crony capitalism: No country is safe from the risks posed by connections between politicians and private companies; scandals involving conflicts of interest plague governments around the world. Using a detailed dataset from the Czech Republic, this column demonstrates that ties between political parties and boards…
50 years of NTPC and NHPC (National Thermal Power Corporation and National Hydel Power Corporation ) | Mostly Economics
NTPC and NHPC established in 1975 celebrated their 50th anniversaries. NHPC, India's premier hydropower company and NTPC, India’s largest integrated power utility, commemorated their 50th Raising Day and entry into the Golden Jubilee year with a grand joint celebration at Bharat Mandapam, New Delhi on 9th November 2024. The event marked a significant milestone for both the…
Inside the Boardroom: Evidence from the Board Structure and Meeting Minutes of Community Banks | Mostly Economics
Rosalind L. Bennett, Manju Puri, and Paul E. Soto in this Federal Reserve paper: Community banks are critical for local economies, yet research on their corporate governance has been scarce due to limited data availability. We explore a unique, proprietary dataset of board membership and meeting minutes of failed community banks to present several stylized facts…
Revisiting Anna Shwartz’s contribution in “A Monetary History of the United States, 1867–1960” | Mostly Economics
Jennifer Burns in this new Journal of Economic Perspectives paper: What was the contribution of Anna Schwartz to the landmark book she co-authored with Milton Friedman, A Monetary History of the United States, 1867–1960? A close examination of archival evidence suggests three primary contributions Schwartz made to the work, and to Friedman's career more generally.The first…
Cultural determinants of maternal labour supply: East Germnay vs West Germany | Mostly Economics
Fascinating research by Barbara Boelmann Anna Raute Uta Schönberg: In a recent paper, we investigate the role of cultural norms in shaping women's labour supply decisions after childbirth within the context of reunified Germany (Boelmann et al. 2024). The German reunification brought the more gender egalitarian East German culture together with the more gender traditional…
Adam Smith in the City of Light | Mostly Economics
F. E. Guerra-Pujol and Alain Alcouffe in this paper discuss Adam Smith days in Paris: The general outline of Adam Smith’s travels in Europe has been retold many times, but little is known about his comings and goings in Paris. What we can say, however, is that the Scottish philosopher’s time in the City of…
How big businesses helped in rise of the Nazi empire | Mostly Economics
Karsten Heinz Schönbach in this new INET paper points how the big businesses, in this case coal imdustry of Germnay facilitated rise of Hitler: Ever since the publication of Henry Turner’s German Big Business and the Rise of Hitler, most historians in both Germany and the United States have dismissed the idea that support from…
Minsky moment for Indian Test cricket? | Mostly Economics
One is still trying to recover from the shock of the outcome of the recently concuded India-New Zealand 3 Test series. It would have been amazing if NZ won a single test, unbelievable if NZ had won the test series, but a 3-0 whitewash? That too in India to India?! I mean this is just…
Recent Chinese Monetary Policy decisions and pursuit of high-quality development of the Chinese economy | Mostly Economics
Pan Gongsheng, Governor of the People's Bank of China explains the recent Chinese monetary policy decisions: According to arrangements of the CPC Central Committee, financial regulators announced a package of policies to support stable economic growth on September 24. The move attracted great attention and received extensive support. The day before yesterday, the PBOC, the…
Marking the Bank of England’s links to transatlantic slavery | Mostly Economics
Kirsty Parsons and Jennifer Adam on the Bank of England Museum blog: Since our exhibition Slavery & the Bank closed we, along with colleagues in the Bank’s Archive team, have been continuing work on recording the Bank’s links to transatlantic slavery and the slave trade. We’ve also been considering the legacy of this exhibition and…
Monetary policy in an era of supply headwinds – do the old principles still stand? | Mostly Economics
Andréa M Maechler, Deputy General Manager, Bank for International Settlements in this speech disucsses developments in monetary policy: Adverse supply shocks have played a significant role in the post-pandemic inflation surge, when inflation rates in advanced economies reached levels not seen since the 1970s. The future is likely to bring more volatile inflation due to…
Government-guaranteed credit and populism | Mostly Economics
Ernest Dautović and Robin Hsieh in this ECB paper: The phenomenon of political populism and its financial determinants have proved elusive. We utilise the sudden and uneven change in credit conditions during the COVID-19 pandemic and the unprecedented government credit guarantee programme in France to investigate whether liquidity support to firms affects political preferences. Drawing…
What financial markets say about the economic implications of a potential Trump election victory | Mostly Economics
Sören Karau and Johannes Fischer in this voxeu research: There is large uncertainty around the economic effects a second Trump term would have. This column assesses the potential implications of Trump winning the upcoming election through the lens of financial market participants. The authors find that investors associate a higher likelihood of Trump winning with…
The journey of inflation targeting in India | Mostly Economics
Inflation Targeting completed eight years in India. Radhika Pandey, Ila Patnaik and Rajeswari Sengupta review the journey over the eight years: It has been eight years since India adopted the inflation targeting (IT) framework for its monetary policy. In this paper we present a comprehensive analysis of the IT regime, addressing several critical aspects. We…
The ECB’s accountability to the European Parliament 2019-2024: commitment in times of change | Mostly Economics
Ferdinand Dreher, Nils Hernborg, Sarah Mochhoury, Timothy Mulder and Hanni Schölermann in this ECB article points to accountability of European Central Bank: During the ninth term of the European Parliament (2019-2024), the ECB took decisive measures to ensure price stability in the euro area. The economic fallout from the pandemic and the subsequent surge in inflation,…
Perceived Political Bias of the Federal Reserve: What does public think? | Mostly Economics
In an NBER paper, Pei Kuang, Michael Weber & Shihan Xie survey US people to figure independence of Fed: We conduct a survey experiment with a large, politically representative sample of U.S. consumers (5,205 participants) to study how perceptions of the U.S. Federal Reserve’s (Fed) political stance shape macroeconomic expectations and trust in the Fed. The…
Currency denomination of foreign exchange reserves: From taboo in the past towards disclosure and exciting research nowadays | Mostly Economics
Falk Laser, Alexander Mihailov and Jan Weidner in this voxeu piece discuss how research on forex reserves is changing over the years: There has been a growing trend towards more disclosure by central banks on the currency denomination of their foreign exchange reserves. This column introduces a new comprehensive dataset on the currency composition of…
The Medici’s quiet coup: How the wealthy bend politics without shifting institutions | Mostly Economics
Marianna Belloc, Roberto Galbiati and Francesco Drago in this post on voxeu research: The Medici family ruled Florence for nearly 300 years, patronising the arts and making Florence a cultural centre of Europe. But there was a dark side to Medici rule. This column studies the circumstances under which a relatively open political system can…
A Teacher Writes to Students Series (31): Nonconformist Economic Education | Mostly Economics
A Teacher Writes to Students Series (31): Nonconformist Economic Education Annavajhula J C Bose, PhD Department of Economics (Retd.), SRCC, DU The 2019 book by Professor Daniel E. Saros can be freely downloaded from Mountain Scholar. It is a beacon of light for everyone open-minded in economics—an unconventional intellectual gift from the Valparaiso University. This…
The Evolution of Central Bank Communications in Reserve Bank of Australia | Mostly Economics
Michael Stutchbury of The Australian Financial Review traces history of communications at RBA: The Reserve Bank’s adoption of a 2-3 per cent inflation target in the early 1990s opportunistically took advantage of a recession driven by high interest rates but not blamed on the central bank. The framework, including through the Reserve Bank’s new operational…