|
Fiscal
Policy and Global Growth  |
| Jul
27th 2010, C.P.
Chandrasekhar and Jayati Ghosh |
|
|
Across
the world governments are debating whether it is time
to exit from their fiscal response to the global crisis
and return to austerity and fiscal consolidation. This
may be premature, since the question whether there was
indeed such a generalized and adequate fiscal response
that triggered a recovery remains unanswered. |
|
| Fiscal
Discipline and All That |
| Jul
27th 2010, Jayati
Ghosh |
|
| There
was a sudden resurgence in Keynesian ideas everywhere
when the global financial crisis broke in September
2008. But, equally suddenly, financial markets have
once again turned back on state intervention and policy
makers are giving in to demands for massive cuts in
public expenditure that would require enormous sacrifices
from their populations. |
|
|
Financial Euphoria and Aftershock |
| Feb
24th 2010, Jayati
Ghosh |
|
| John
Kenneth Galbraith's analysis of the capitalist economy
in the delightfully written tract ''A Short History
of Financial Euphoria'' remains as relevant today as
it was then. However, unlike what Galbraith offers,
the solution to capitalism's proneness to recurrent
bouts of speculation has to go beyond capitalist markets
and profit motivation. |
|
| The
Crisis and Employment in Asia |
| Feb
15th 2010, C.P.
Chandrasekhar and Jayati Ghosh |
|
| Despite
scepticism about its sustainability, evidence shows
that the crisis of 2008-09 has bottomed out and a recovery
is likely, driven by the fiscal stimulus offered by
governments across the world. But figures from the ILO
indicate that the impact of the stimulus on employment
appears uneven, with export dependent economies in Asia
too adversely affected. |
|
| Cloud
over Islamic Banking |
| Dec
26th 2009, C.P.
Chandrasekhar and Jayati Ghosh |
|
| The
large surpluses which accumulated with West Asian oil
exporters after the 1970s generated a demand for financial
products that were sharia-compliant. The Islamic financial
industry, which grew as a result, was seen as a different
and safer component of the global financial sector.
But the Dubai World debacle and much else suggests that
these judgments were not warranted. |
|
|
Sovereign Default in the Core? |
| Dec
22nd 2009, C.P.
Chandrasekhar |
|
| The
possibility of sovereign default flagged in by Dubai
World together with the changed distribution of sovereign
debt globally has created a new context: it is not governments
of poor developing countries that are now the principal
source of danger, but the metropolitan centres of capitalism. |
|
|
Recovery or Bubble? |
| Dec
2nd 2009, C.P.
Chandrasekhar |
|
| Although
the US's policy of easy money triggered a recovery in
some economies, it has generated a bubble similar to
the one that preceded the 2008 downturn. Thus the emerging
story of a new speculative boom and a fresh bubble driven
by finance capital has led to growing fears of a second
downturn or double dip recession. |
|
| The
Recovery in Asia |
| Nov
18th 2009, C.P.
Chandrasekhar and Jayati Ghosh |
|
| Asia's
recovery from the crisis has been remarkable, with the
aggregate evidence from the region pointing to a V-shaped
growth trajectory since the onset of the crisis. While
fiscal stimulus in some countries, especially China,
has been crucial both nationally and regionally, the
role of the revival in credit-financed private demand
should not be ignored. |
|
| On
the Dollar's Decline |
| Oct
21st 2009, C.P.
Chandrasekhar |
|
| The
article investigates whether the IMF SDR can replace
US Dollar as the global reserve currency in the wake
of falling prices of the latter. The author concludes
that US Dollar remains the primary global currency because
there is no other to replace it. |
|
| G20
and the Global Power Balance |
| Oct
5th 2009, C.P.
Chandrasekhar |
|
| When
the 19 heads of state and a representative of the European
Union declared that from now on it would be the G20
and not the G8 that would be responsible for managing
global capitalism they were merely recognising the unavoidable.
However, if expansion of the club responsible for managing
global capitalism was unavoidable, the G20 reflects
the combination which would be preferred by the leading
powers. |
|
| The
Financial Crisis One Year on |
| Sep
16th 2009, Jayati
Ghosh |
|
| The
enormous bailouts carried out by governments to avert
a global economic collapse after the Lehmann Brothers
debacle should have been accompanied by much more systematic
and aggressive attempts at financial regulation. This
opportunity wasted by governments will prove to be expensive.
We should brace ourselves for an even worse replay of
the financial crisis in the foreseeable future. |
|
| Global
Trade in a Time of Crisis |
| Jul
28th 2009, C.P.
Chandrasekhar and Jayati Ghosh |
|
Among
the many differences of opinion that the global crisis
generated, one was whether in a more integrated world
there could be an element of desynchronization in the
incidence and intensity of crises. In particular, views
diverged on whether China and India would weather the
crisis and serve as shock absorbers for the world economy.
This article assesses the implications of recently released
data on world trade to address these questions. |
|
| Reregulating
Finance Obama Style |
| Jul
1st 2009, C.P.
Chandrasekhar |
|
| The
much awaited package that the Obama administration announced
recently incorporates a number of important regulatory
advances. Firstly, the package gives a new role for
the Federal Reserve in overseeing and regulating the
bank and non bank entities. It also talks of new guidelines
with respect to capital adequacy and prudential norms.
But, unfortunately, there are many features that were
expected to be dealt with but have been missed out in
the new package. |
|
| The
Signs of a Global Recovery |
| Jun
16th 2009, C.P.
Chandrasekhar and Jayati Ghosh |
|
| A
world in recession since the end of 2007 is searching
for signs that suggest the system is approaching the
bottom of the downturn and is likely to experience a
recovery. This article argues that even if the downturn
is touching bottom in terms of the stabilisation of
the rate of decline of GDP in the developed world, the
decline could persist. Further, it is unclear whether
there would be adequate alternative stimuli to sustain
the recovery when the effects of the already implemented
fiscal stimulus wane. |
|
| The
International Transmission of Fragility |
| May
10th 2009, C.P.
Chandrasekhar and Jayati Ghosh |
|
| According
to the IMF, if the global financial crisis had principally
impacted the developed market economies at its onset,
in recent months conditions have deteriorated the most
in emerging markets. This has occurred largely because
of the effects of a capital reversal coming in the wake
of an earlier surge in capital inflows into emerging
markets, indicating that the lessons from boom-bust
cycles since the 1990s have not been absorbed. |
|
| Has
a Global Contagion Affected Indian Finance? |
| Apr
24th 2009, C.P.
Chandrasekhar |
|
| One
probable reason why the recently released report of
the Financial Sector Assessment Programme could not
attract due attention is that the very assumption of
the benefits of financial integration, on which the
FSAP is anchored, is nullified by the current recession
in the real economy. However, as this article shows,
the report helps in a better understanding of the effect
of the global recession on the Indian financial system. |
|
| The
G20 Summit |
| Apr
24th 2009, Jayati
Ghosh |
|
| All
expectations about the G20 Summit to revive the global
economy and set a new financial infrastructure were
in vain as it did not produce any extraordinary response
currently needed to pull the economy. The communiqué
that was released mentioned nothing on the fiscal front
and had no clear commitment to a co-ordinated fiscal
stimulus except only a promise of $850 billion to crisis-hit
poor countries. |
|
| Whatever’s
Happened to Global Banking? |
| Mar
4th 2009, C.P.
Chandrasekhar & Jayati Ghosh |
|
| The
call for nationalization of banks in developed countries,
even if for a temporary period, marks a potential ideological
shift. Even staunch free market advocates are declaring
that nationalization is inevitable. This article examines
the factors explaining this acceptance of public ownership
and the implications that this has for the future of
banking regulation. |
|
| The
Asian Face of the Global Recession |
| Feb
10th 2009, C.P.
Chandrasekhar & Jayati Ghosh |
|
| As
news of the intensity of the global downturn worsens,
so do assessments of the extent of its global spread.
This is distressing since it implies that the argument
that a “decoupled” Asia could serve as a shock absorber
that moderates the impact of the crisis was wrong. |
|
| Global
Crisis and Commodity Prices |
| Dec
31st 2008, C.P.
Chandrasekhar & Jayati Ghosh |
|
| The
extreme volatility of commodity prices in world trade
over the past year in particular is one more reflection
of the turbulence in the global economy. While some
of these price changes may have their origin in financial
markets rather than in changes in real demand and supply,
they nonetheless have major effects upon producers and
consumers. The authors examine trends in prices of some
major commodities in international trade in the past
two years and discuss their implications. |
|
| A
Recessionary Tide that won’t Recede |
| Dec
27th 2008, C.P.
Chandrasekhar |
|
| The
recently released data from various international agencies
show that the recession in the US economy had begun
as early as December 2007 and is spreading across the
globe. Temporary measures aimed at moderating the downturn
are in place, but there is much pessimism about how
long the recession would last. |
|
| Global
Recession: How Deep and for How Long? |
| Dec
17th 2008, C.P.
Chandrasekhar & Jayati Ghosh |
|
| Global
attention has now shifted from concern over the dimensions
of the financial crisis to assessing how deep the real
economic recession it has triggered would be and how
long it would last. With the recession intensifying
and projections turning more pessimistic, there are
reasons to fear that a recovery expected in 2010 may
not materialize. |
|
| The
Economy: Can Obama Fix It? |
| Nov
18th 2008, C.P.
Chandrasekhar |
|
| The
victory of Barack Obama in the US Presidential elections
is a historic event. However, Obama is inheriting a
crisis-affected US and world economy comparable to the
Great Depression of the 1930s. It will be an uphill
task for Obama to steer through this crisis. |
|
| Surely
Not the IMF Again? |
| Nov
18th 2008, Jayati
Ghosh |
|
There
is an urgent need to examine alternative sources of
emergency finance for crisis-affected developing countries,
which are less destructive than the IMF. The latter’s
intellectual autism and double standards in policy prescriptions
for industrial and developing countries are once again
reflected in its most recent World Economic Outlook. |
|
| Argentina:
The Return of the Phoenix |
| Oct
24th 2008, Jayati
Ghosh |
|
| The
financial crisis in the US has forced the Government
to undertake a bail-out plan, which depends to a large
extent on tax-payers money and on resources from other
countries, including developing Asia. Developing countries
facing such crises are however not so fortunate. The
case of Argentina points to how heterodox policies can
take a developing economy out of a severe financial
crisis. |
|
| Capitalism
in Transition? |
| Oct
22nd 2008, C.P.
Chandrasekhar |
|
| The
takeover of major private banks by developed country
governments is a desperate attempt to stall the financial
meltdown in these economies, which resulted from the
decision to allow private financial players unfettered
freedom to pursue profits at the expense of all else.
This threat has forced governments to drop their neo-conservative
bias against State ownership. |
|
| In
Search of Causes |
| Oct
22nd 2008, C.P.
Chandrasekhar |
|
| As
the financial crisis in the advanced economies intensifies,
analyses of the causes of the crisis and its sources
have multiplied. But, there is a degree of implicit
agreement among different analyses that the crisis can
be traced to forces unleashed by the transformation
of US and global finance starting in the 1970s. |
|
| The
End of Neo-Liberalism |
| Oct
21st 2008, Prabhat Patnaik |
|
| The
solution to the crisis that the triumph of neo-liberalism
has precipitated is increasingly being seen to lie in
the part-nationalization of financial institutions in
the capitalist world. This represents a negation of
neo-liberalism's basic premise. |
|
| A
Perspective on the Crisis |
| Oct
18th 2008, Prabhat Patnaik |
|
| After
the demise of the Keynesian policies, the world economy
has been dependent upon private expenditure for boosting
aggregate demand. The consequent boom causes deterioration
in the conditions of people in the third world, while
the crash also adversely affects them. The present financial
crisis also will have a similar impact on the masses
of the third world. |
|
| Socialising
Losses |
| Oct
10th 2008, C.P.
Chandrasekhar |
|
| There
are reasons to believe that the current package in the
US bail out Bill will fail to address the financial
crisis adequately and restore stability. Meanwhile,
globally, markets are in a state of collapse, partly
driven by the expectations generated by the scaremongering
used to push through the package. |
|
| The
Global Financial Crisis
|
| Sep
29th 2008, Jayati
Ghosh |
|
The
bailout worked out by the US government to save the
financial system is not a progressive nationalisation
but the socialisation of the risks of capitalists, and
one that is to be borne by taxpayers in the US and by
developing countries. The hugely expensive gamble, instead
of helping the US government buy its way out of the
crisis, would weaken its position as the dominant imperial
power in future. |
|
| A
Long View of Global GDP Growth
|
| Jul
26th 2008, Jayati
Ghosh |
|
It
is sometime useful to situate recent income growth in
the longer term context, if only to remind ourselves
of the structural processes involved. A close examination
of long term patterns in relative positions show that
the recent optimism about developing countries emerging
as dominant players may be misplaced. |
|
| World
Prices and The Transmission of Inflation
|
| Apr
8th 2008,
Jayati
Ghosh |
|
The
recent global rise in inflation is partly demand-led,
the result of several years of rapid economic growth
and resultant demand. This however may be automatically
controlled since both will act as a constraint on the
other. But more worrying is the fact that the possibility
of stagflation, brought about by supply constraints,
cannot be ruled out. This will be far more difficult
to control. |
|
| The
Global Liquidity Paradox |
| Mar
14th 2008, C. P. Chandrasekhar & Jayati Ghosh |
|
|
One
global fall-out of the sub-prime crisis in the US is
a liquidity squeeze that central banks in the developed
countries are attempting to counter by pumping liquidity
into the system and reducing interest rates. This is
indeed paradoxical, since the crisis in the first place
was a result of an excessive build up of liquidity in
the international system, leading to a synchronized
boom in stock and real estate markets across the globe.
Explaining the paradox requires understanding how the
liquidity spiral occurs and how such liquidity is put
to use by a liberalized and globalized financial system. |
|
| China's
African Hinterland |
| Mar
10th 2008, C. P. Chandrasekhar & Jayati Ghosh |
|
|
China's
growing presence in Africa has led to arguments that
the country is seeking to meet its growing requirements
of primary products, including oil, by building a relationship
reminiscent of a colonial past with many African countries.
In this article, the authors examine what the evidence
reveals about this relationship. |
|
| Oil
Prices and the US Dollar |
| Mar
7th 2008, C. P. Chandrasekhar & Jayati Ghosh |
|
|
The
depreciation of the US dollar has been closely bound
up with the movement of oil prices, as world oil trade
is typically denominated in dollars. Yet this relationship
may now be under threat as the dollar continues to depreciate
and the US economy tips into recession. This article
examines how oil prices have changed with different
numeraires, and considers the implications for the future
of the oil-dollar nexus. |
|
| Can
China Become the New Growth Pole for Asia? |
| Mar
3rd 2008, C. P. Chandrasekhar & Jayati Ghosh |
|
|
With
the US economy clearly tipping into recession, international
attention is now focussed on the extent to which China
and India can create an alternative growth pole for
the world economy through their increasing demand. In
this article, the authors assess the potential for China
to play such a role by analysing its trade pattern with
developing Asia. |
|
| Jobless
Growth in Chinese Manufacturing |
| May
15th 2007, C.P Chandrasekhar and Jayati Ghosh |
|
|
While
China is increasingly seen as “the workshop of the world”
and there are fears of relocative shifts in manufacturing
output and employment away from other countries to China,
the recent pattern of manufacturing growth appears to
have been characterised by declining employment. In
this paper, the authors investigate the trends in manufacturing
employment in China and consider the reasons for this
paradox. |
|
| Lessons
from the US Sub-prime Lending Crisis |
| Apr
18 th 2007, C.P Chandrasekhar and Jayati Ghosh |
|
| All eyes are
directed at the US housing market that has been afflicted
with a meltdown in its sub-prime mortgage segment. With
housing asset values having driven the US economy, which
in turn serves as locomotive for the rest of the world,
fears are that this American disease could trigger a global
slowdown. The assumption is that the original problem
is quintessentially American. If it is not, the authors
argue, the US experience can have other lessons for countries
like India. |
|
| The
Revised Basel Capital Accord: The Logic, Content and Potential
Impact for Developing Countries |
| Aug
31st 2006, Smitha
Francis |
| Basel
II is the modified framework of supervisory regulations
governing capital adequacy for internationally active
banks, published by the Basel Committee of Banking Supervision.
This paper argues that while the Revised Accord is yet
another attempt by the global financial community to remedy
the woes associated with unhindered financial liberalization,
it will only serve to exacerbate the already existing
conflicts between the objectives of financial stability
and economic development facing developing countries under
the present paradigm. |
|
| Concentration
in the Competitive Software Business |
| Aug
11th 2006, C.P. Chandrasekhar and Jayati Ghosh |
|
The
success of India in the global market for software services
has encouraged the view that software is a competitive
industry with limited barriers to entry and space for
new and small players. In reality, however, US firms
dominate the global software market with a high degree
of concentration. The authors argue that some of the
factors explaining this structure have implications
for an assessment of the Indian industry.
|
|
| Explaining
the Stock Market Correction |
| May
30th 2006, C.P. Chandrasekhar and Jayati Ghosh |
|
The
second fortnight of May witnessed a much needed though
still inadequate correction of the recent unprecedented
rise of the Sensex. Yet, in the blame-game that followed,
inadequate ''reform'' stemming from political opposition
has been seen by some observers to have caused a ''loss
of wealth'' In this article, the authors examine the
context and nature of the downturn and the validity
of these arguments. |
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