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Three financial crises and lessons for the future | Mostly Economics
Chairman Martin J. Gruenberg of FDIC in this speech reviews lessons from the three financial crises: 1980s Savings and Loan crisis, 2008 Financial Crisis and 2023 Regional Bank failures: I would like to thank the Brookings Institution, and my friend Aaron Klein, for giving me the opportunity to speak to you today. For better or…
Before banks: Historical lessons for rethinking credit | Mostly Economics
Elise Dermineur explores the world before banks in Europe. He says that the earlier credit systems were more inclusive : The global financial crisis of 2008 has led economists, historians, and policymakers alike to re-examine the foundations of our financial infrastructure. This column revisits the world of credit before the rise of modern banking to…
Inside a 100-year-old Plant That Keeps Mumbai Lit: Tata Power’s Bhivpuri hydropower plant | Mostly Economics
Anju Maskeri on Tata's 100 year old power plant that lights Mumbai: There’s no understating the comfort and convenience that comes with uninterrupted electricity. For over a century, Tata Power's Bhivpuri hydropower plant has been providing clean energy to Mumbai. Situated in Raigad district near Mumbai, the construction of the Bhivpuri plant began in 1916…
Public sentiment matters: Essence of successful energy subsidies and pension reforms | Mostly Economics
IMF's Public Finance Monistor (April 2025) has a chapter on energy subsidies and pension reforms: This chapter examines strategies to build public support for reforms to energy subsidies and public pensions, which are crucial for reducing fiscal vulnerabilities and fostering inclusive growth. Energy subsidy reforms enhance efficiency and reduce inequality, while pension reforms ensure sustainability…
From distraction to dedication: commitment and incentives against phone use in the classroom | Mostly Economics
Billur Aksoy, Lester R. Lusher & Scott E. Carrell in this NBER paper look at one of the biggest problems of education: students using smartphones. Phone usage in the classroom has been linked to worsened academic outcomes. We present findings from a field experiment conducted at a large public university in partnership with an app marketed as a…
Three Years of RBI’s Standing Deposit Facility: Some Insights | Mostly Economics
RBI Bulletin (Apr 2025) has this interesting article by Avnish Kumar, Priyanka Sachdeva, and Indranil Bhattacharyya. They analyse three years of RBI's Standing Deposit Facility: Marking three years since its introduction, the Standing Deposit Facility (SDF) has been an important component of the Reserve Bank of India's liquidity management framework, replacing the fixed rate reverse…
Two manuscripts of William Petty | Mostly Economics
Tony Aspromourgos transcribes two manuscripts of William Petty: This article provides transcriptions of two manuscripts of William Petty (1623–1687), together with a substantial editorial apparatus. The first manuscript analyses the feasibility of doubling the population of England plus Ireland and Scotland in 25 years; the second considers how a uniform taxation might be imposed upon…
Exchange Traded Funds (ETFs) as a disciplinary device | Mostly Economics
Yuet Chau, Karamfil Todorov and Eyub Yegen in this BIS paper show how ATFs act as a disciplinary device: We document a novel feature of active exchange-traded funds (AETFs): they serve as a disciplinary tool for investors to remove underperforming portfolio managers. Unlike mutual fund shares, ETF shares can be shorted, which enables investors to bet against manager…
Rise of the silver economy: Global implications of population aging | Mostly Economics
World Economic Outlook April 2025 has a chapter on the rise of the silver economy. No it is not the silver metal but the silver hair: As the global population ages, economies worldwide are experiencing significant demographic shifts with profound implications. Chapter 2 explores the rise of the "silver economy," focusing on the extent of…
A Teacher Writes to Students Series (43): Biomimicry Business | Mostly Economics
A Teacher Writes to Students Series (43): Biomimicry Business By Annavajhula J C Bose, PhD Department of Economics (Retd.), SRCC, DU Many econ and commerce students I had taught, want to take up some business or the other but most of them are ignorant about good business as the biomimicry business that respects Life’s Principles…
Good data is hard to find: From declining role of surveys to rise of big data | Mostly Economics
Tim Sablik of Richmond Fed traces the history of data in macro policy: Fed officials frequently describe their monetary policy decisions as data dependent. As the central bank has navigated the recovery from the COVID-19 pandemic, a common refrain in its policy statements is that the Federal Open Market Committee (FOMC) will "carefully assess incoming…
SEBI needs to re-visit its ban on derivatives in commodities | Mostly Economics
My new piece in Moneycontrol: Last month, the regulator extended the ban on trading in seven commodities by another year. It’s high time to end this ban. Government appointed committees have shown that a causal link between futures markets and inflation is not supported by data. This misplaced fear hurts farmers
The Adventure of Money “From Gold to the Digital Euro” | Mostly Economics
Bank of Italy organised an exhibition on the history/adventure of money. Governor Fabio Panetta of Bank of Italy in his remarks discusses the adventure: The Adventure of Money is a journey through five thousand years of history, a journey in which economics, society, politics and technology converge. It is a narrative that traces the evolution…
How to teach your child about financial literacy? | Mostly Economics
Prof Olivia Mitchell of Wharton on financial literacy: Twenty-five states now require high school students to take a personal finance course before graduating, yet financial literacy remains low in the United States. About half of American adults cannot correctly answer three multiple-choice questions designed to test basic money knowledge. Wharton economist Olivia S. Mitchell, who came up…
The curious surge of US restaurant productivity: The role of take-out and delivery | Mostly Economics
Chad Syverson, Rebecca Goldgof and Joe Tatarka in this article discuss the impact of take-out and delivery on restaurant productivity: After remaining stagnant for decades, labour productivity in the US restaurant industry experienced a 15% surge during the COVID-19 pandemic – growth that has persisted since. This column examines the potential sources behind this unexpected…
Hamdard Roohafza contorversy: Not a word by any of India’s business leaders | Mostly Economics
I wrote earlier on how the Roohafza controversy is a huge low in India's business history. The sharbat developed in 1906 by Hamdard has been a part of several households over more than a century. The Hamdard group has quite a history: In 1906, in undivided India's capital, Delhi, a devoted, determined, yet unworldly man,…
What was behind the sudden resignation of Reserve Bank of New Zealand Governor? | Mostly Economics
There was a time when Reserve Bank of New Zealand was seen as this benchmark for global central banking. After all, RBNZ pioneered not just inflation targeting but also communication and transparency practices. Of late, RBNZ is making all the wrong noises or not the right ones atleast. It has flip-flopped over its objectives. It…
Teaching Gandhi in the Age of TikTok | Mostly Economics
Chitralekha Zutshi in TheIndiaForum: Many students today have a negative view of Gandhi, based on a slanted representation that is widely prevalent online. It is challenging but fruitful to explore these views and expose students to a multitude of perspectives, including Gandhi’s own reflections and responses to criticisms.
In science we trust? European enlightenment in the harsh world of geopolitics | Mostly Economics
Olli Rehn, Governor of Bank of Finland draws upon European history for providing hope in today's "dark times": I’d like to structure my talk today under three themes. First, I will reflect on the genesis and progress of European integration, rooted in the Age of Enlightenment. Second, I will focus on Europe’s security challenges amid…
How firms capture political power in democracies? | Mostly Economics
A question for the times we live in: How firms capture political power in democracies? Matilde Bombardini & Francesco Trebbi in this NBER paper provide some answers: This paper presents a holistic view of the channels of political influence of large corporations in modern democracies, focusing not only on well-studied instruments, such as campaign contributions and lobbying,…
Let’s speak the same language to describe and compare payment system architectures | Mostly Economics
Kees van Hee, Anneke Kosse, Peter Wierts and Jacob Wijngaard in this BIS paper write about a very important topic. There are jut so many payment systems and each with its differnet language. We need some kind of standardisation: Proposals for new payment system architectures abound. To understand their opportunities and challenges, it is paramount to be able to…
The Promise of American Higher Education: Harvard edition | Mostly Economics
The Trump administration is targeting and pressurising US universities. It is hardly surprising as all such strongmen leaders usually target educational institutions as by capturing educational institutions one runs and controls propaganda. Harvard University President Alan Garber responds to the government: Dear Members of the Harvard Community, For three-quarters of a century, the federal…
From partner to rival: The sectoral evolution of China’s trade | Mostly Economics
A team of economists (Francois de Soyres, Ece Fisgin, Alexandre Gaillard, Ana Santacreu and Henry Young ) trace historical evolution of China's exports: Over the past decade, China has shifted towards greater self-reliance while enhancing its export competitiveness in advanced economy markets. This column introduces a new index to assess sectoral trade alignment across countries.…
Do central bank reforms lead to more monetary discipline? | Mostly Economics
Alexander Jung, Davide Romelli and Etienne Farvaque of ECB discuss central bank reforms: This paper investigates the impact of reforms altering legal central bank independence (CBI) on monetary policy discipline and credibility, two key mechanisms shaping price stability. Using a sample of 155 countries over more than 50 years (1972–2023), we show that reforms improving…
How do banks choose where to place branches? US edition | Mostly Economics
Ezra Oberfield, Esteban Rossi-Hansberg, Nicholas Trachter, and Derek Wenning have this interesting paper on banks choosing where to place branches. Nicholas Trachter summarises the paper in Richmond Fed's Economic Brief. Before deregulation, top banks operated in dense counties but relied on expensive wholesale funding. Post deregulation, banks moved to areas where they could get cheaper…
Major economic upheavals: A brief economic history of the last 100 years | Mostly Economics
Trump tariff has added to the list of major economic upheveals. Uwe Bott, chief economist at Globalist sums up the major events of the last 100 years: April 2, 2025 may well enter the annals of modern economic history as an important turning point. For very implausible reasons, the United States of all countries exits…
WTO watching helplessly the meltdown of the international trade system | Mostly Economics
All you need is one so called strongman leader to dismantle in no time years of efforts to build international/national systems. In Bretton Woods Conference, International trade was seen as one of the ways to foster global peace. The proposed International Trade Organisation did not take off right away. Instead the world opted for General…
Trump’s demonetisation moment | Mostly Economics
Vir Sanghvi compares US reciprocal tariffs to India's demonetisation: If the world’s economists are right, then Trump’s tariff policy will end up being a bigger disaster for the US than Modi’s demonetisation was for India. It will also severely damage the global economy. And even if Trump is right, there will be months and months of suffering…
The mainstream economics’s obsession with a 19th-century illusion: equilibrium | Mostly Economics
James Galbraith has co-written a new book with Jing Chen: Entropy Economics: The Living Basis of Value and Production. In this interview with Lynn Paramore, he discusses the key highlights of the book and much more: Economics has a dirty secret. What if a core principle of mainstream economic theory—still taught in top universities, printed…
Sharbat jihad: A new low in History of Indian Business | Mostly Economics
Indian society is slipping into a dark hate hole with each passing day. It has touched a new low when particular Sharbat is being targeted for Sharbat jihad. Yoga guru Ramdev has stirred controversy with his remarks warning people against what he termed “sharbat jihad,” drawing a parallel with “love jihad” and “vote jihad.” In a…
A “European moment” in an inverted world and remembering Peter Sutherland | Mostly Economics
Peter Sutherland headed General Agreement of Tariff and Trade in its most crucial years of 1993-95. He is seen as critical to shaping GATT into World Trade Organisation. ECB President Christine Lagarde received the Sutherland award and remembered Sutherland in these crucial times when world trade is falling apart: It is an honour to receive…
Book Review: The Heartbeat of Trees | Mostly Economics
Book Review: The Heartbeat of Trees Peter Wohlleben. 2021. The Heartbeat of Trees: Embracing Our Ancient Bond with Forests and Nature. Penguin/Viking. Translated by Jane Billinghurst. ISBN 9780670095377. Annavajhula J C Bose, PhD Department of Economics (Retd.), SRCC, DU There is a “reason in a dark time” for me to select this book for review…
Distinguished Indian Economists: Swaying Minds and Shaping the Modern Indian Economy | Mostly Economics
A team of economists (mostly from Azim Premji University) has put up this exciting resource of profile of Indian economists: This project explores the contributions of modern Indian economists, whose ideas and analyses have not only shaped India’s economic trajectory but also generated deeper understandings of development and growth in the country. It aims to…
Singapore Prime Minister Lawrence Wong’s speech on Trump Tariffs | Mostly Economics
As world leaders (both appointed and self-appointed) of big economies struggle with to comprehend Trump tariffs, a leader from a tiny economy gives hope. Singapore Prime Minister Lawrence Wong gave a stirring speech in Parliament discussing the tariffs and its impact on Singapore. It helps that he is also an economist who can connect the…
Financial literacy and monetary policy transmission | Mostly Economics
ECB Member Isabel Schnabel discusses importance of financial literacy in mon pol transmission: According to our latest public opinion survey, more than 90% of respondents are aware of the European Central Bank.[1][2] But when asked about our tasks, only 43% said they know that the ECB is responsible for maintaining price stability, despite inflation continuing to…
Why America is acting this way on trade: A globotics shock, a failed social policy, and middle-class fury | Mostly Economics
Richard Baldwin on why America is acting this way on trade: If Trump’s trade policy is the earthquake, the long-standing hardships confronting America’s middle class are the tectonic plate shifts that made it inevitable. America was hit by globalisation and robotics shocks like all advanced economies, but unlike other advanced economies, it failed to help…
Explaining the Trump Reciprocal Tariff Calculations | Mostly Economics
US Trade Representative has a summary of the Trump formula applied to determine reciprocal tariffs. The summary is a classic way of using symbols to hide lack of any economic logic. Consider an environment in which the U.S. levies a tariff of rate τ_i on country i and ∆τ_i reflects the change in the tariff…
Evolution in and of monetary policy frameworks since Bretton Woods | Mostly Economics
David Cobham analyses monetary policy frameworks since Bretton Woods. He says the more things change, the more they remain the same (Moins ça change, moins c’est la même chose). The 2008 crisis and the Covid-19 pandemic presented monetary policy frameworks worldwide with significant challenges. This column reports the results of an updating of the Comprehensive…
Donald Trump: King Ludd in the 21st Century | Mostly Economics
Parikshit Ghosh of LSE in TheIndiaForum compares Trump to King Ludd: For Democrats, losing one election to Donald Trump may be regarded as misfortune; losing two looks like carelessness. The coronation of an American demagogue in 2016 felt like an accident; his defeat in 2020 seemed to signal the world is returning to normalcy. The…