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The Gathering Storm Clouds
28 May, 2018, Praveen Jha & Amit Chakraborty
The Indian Economy has all along been critically dependent upon the inflow of speculative finance to sustain its balance of payment. It now faces threatening prospects of a spiral as international crude oil prices and U.S. interest rates, that kept its import bill restricted, are on the rise.
Shifting Havens for Capital
30 September, 2011, C.P. Chandrasekhar
In parallel with the sudden strengthening of the dollar recently, the value of a whole host of alternative assets has fallen. In the process developing countries that have been the targets of financial investors and those dependent on commodity exports have become particularly vulnerable.
Global Disorder and the Indian Economy
25 August, 2011, Jayati Ghosh
The Indian economy is showing the classic signs of a bubble economy and any small signs of external vulnerability and economic fragility can cause it to burst. Crucial possible downsides of the current round of global uncertainty for India and other emerging markets include the lack of import demand growth in the US and the EU, renewed inflows of mobile capital, etc.
On the Dollar's Decline
21 October, 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.
Service Exports in Developing Asia
10 September, 2009, C.P. Chandrasekhar & Jayati Ghosh
Services exports have emerged as an important source of foreign exchange and even employment generation for many countries in developing Asia. This is part of the global explosion in services trade, which is evident from Chart 1.
Balance of Payments: Do We Need to Worry?
01 August, 2008, C.P. Chandrasekhar & Jayati Ghosh
It has been some time now since the government has stopped bothering too much about the balance of payments. Indeed, the continuous and even excessive build-up of foreign exchange reserves (which now stand at more than $310 billion, making India’s holding the fourth largest in the world) suggests that the problem may be one of plenty rather than scarcity, far removed from the days when the foreign exchange constraint was seen as binding upon domestic economic growth.
World Prices and The Transmission of Inflation
08 April, 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.
Oil Prices and the US Dollar
07 March, 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.
Too Much of a Good Thing
17 December, 2007, Jayati Ghosh
The massive surge in net capital inflows has put substantial pressure on the rupee. Faced with an unwanted surge of capital that is not being used for productive investment but is associated with a rising exchange rate, the need to put some limits and constraints on the capital inflows, in the form of direct marketing activity in lieu of a capital gains tax, cannot be denied.
Assessing the World Export Boom
06 November, 2007, C.P. Chandrasekhar & Jayati Ghosh
In recent times, the world economy is supposed to have been booming more than ever before, and especially in relation to the past three decades. This boom cannot be because of GDP growth, because aggregate world GDP continues to grow at the same rate of between 2.5 per cent and 3.5 per cent that has been evident since the 1990s. Indeed, since this is calculated in US dollar terms, and the dollar has recently been depreciating somewhat, it is likely that world GDP is not growing faster than the historical trend even in the most recent period.
Appreciating Argentina
06 March, 2006, Jayati Ghosh
It used to be called the ''Paris of the South'' - and there is no doubt that Buenos Aires is a beautiful city with a very European feel. To the outside observer, it does not even appear to be in a developing country, not least because the resident population is almost completely dominated by relatively recent European migrants of the past century and a half.
The Export Growth Story
07 February, 2006, C.P. Chandrasekhar & Jayati Ghosh
Economic reforms since 1991 have been strongly associated with external trade liberalisation. As officially stated, the chief purpose of this was to bring domestic relative prices into line with world prices, thereby supposedly creating conditions for greater efficiency and competitiveness of domestic production.
Developing Countries and the Dollar
30 September, 2005, C.P. Chandrasekhar & Jayati Ghosh
In this article, the authors consider the nature of developing country capital flows and analyse why investing in US dollar assets has become such a favoured use for financial resources that could be used instead to increase economic growth in the developing world.
The Changing Colours of Money
13 January, 2005, Jayati Ghosh
There are several myths about economics that have proved to be very hard to dislodge, despite theoretical proof and empirical evidence that directly contradict them. One such myth is that governments can control money supply.
The Tired Old Subsidies Debate
27 December, 2004, C.P. Chandrasekhar, Jayati Ghosh & Smitha Francis
The National Common Minimum Programme of the UPA government promised many things, and on some of the more crucial issues (such as on the Employment Guarantee ACT) the current central government has shown itself to be less than enthusiastic in terms of fulfilling the true spirit of its promise.
The Dollar vs. the Chinese Yuan
25 December, 2004, C.P. Chandrasekhar & Jayati Ghosh
The dollar is on the decline, with its value having fallen by around 30 per cent relative to other major currencies since 2002 and by close to 20 per cent in trade-weighted terms. Yet, the US government feigns being unconcerned with the problem.
The Dollar Conundrum
04 December, 2004, C.P. Chandrasekhar
In international markets, all eyes are on the dollar, since uncertainty prevails about the depths to which it would decline. The currency, which appeared to have stabilised relative to the euro in early 2003, after declining from as far back as early 2002, has been sliding sharply since early September.
Donors and Dependency in the Expatriate's Paradise
30 June, 2003, Jayati Ghosh
The very name Cambodia evokes many different responses among outsiders. There is first of all, of course, the association with the magnificent and extraordinary ruins of Angkor, which are unparalleled and remain etched in the memory long after the initial viewing.
Globalisation and Economic Depression
11 April, 2002,
Many years ago, the economist Charles Kindleberger had identified the pattern of a financial crisis in his classic work, Manias, Panics and Crashes. The crisis is the last phase of a cycle which begins with an initial boom. The upswing usually starts with some change, such as new markets, new technologies or political transformations. It proceeds via credit expansion, rising prices - especially of financial assets - and euphoria.
Could the World be in Depression Again ?
20 February, 2002,
The talk of possible recession has been in the air internationally for some time now. And of course, after the September 11 attacks on New York and Washington, the US Government, the IMF and others were quick to seize on this as the excuse for predicting a future downturn, which could then be claimed as the adverse fallout of international terrorism.

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