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How China is managing capital flows - and why
24 November, 2017, Jayati Ghosh
China is seeking a more influential role in the global economy, and it hopes to achieve this through greater use of its currency by others.
Economy Plunging Headlong into Recession
16 August, 2017, Prabhat Patnaik
The few days old Volume II of the Economic Survey by Ministry of Finance shows a GVA growth rate much less than that of the previous year, and that too artificially boosted by seasonal variations in non-core sectors. This deceleration is most likely to continue, with growing NPAs and plunging exports, and interest rate cuts will not help in a demand-constrained economy unless the government starts thinking beyond “fiscal rectitude”.
Finance Capital and the Nature of Capitalism in India Today
25 November, 2016, C.P. Chandrasekhar
This article explains how the growing dependence on foreign finance capital has distorted India’s growth. Due to the accumulated presence of foreign capital in the country since liberalisation, it is turning moribund and losing sovereignty.
Capital Bleeds from Emerging Asia
02 February, 2016, C.P. Chandrasekhar & Jayati Ghosh
Capital flight, in 2015, from the emerging markets, especially those in Asia, was much worse than has been previously estimated. This augurs ill for the coming year.
How Vulnerable are Emerging Economies?
06 March, 2014, C.P. Chandrasekhar & Jayati Ghosh
Developing countries face a complex set of challenges in the changing global scenario that does not seem to be factored into economic policies in most countries.
Fragile Foundations: Foreign capital and growth after liberalisation
14 May, 2013, C.P. Chandrasekhar
The shift from debt-financed public expenditure to debt-financed private expenditure-led growth in India has resulted in increased dependence on foreign capital and vulnerability.
Capital Flows and External Vulnerability Examining the Recent Trends in India
29 April, 2013, Prasenjit Bose
The measures to attract additional debt inflows into the Indian economy to finance its widening current account deficit will only enhance its external vulnerability.
Is Global Finance Finally Shrinking?
20 March, 2013, Jayati Ghosh
Even as the value of global financial assets has fallen sharply since 2007, it may be essential to shrink it further to make the financial system fulfil its basic tasks.
Foreign Finance and India's Development
25 September, 2012, C.P. Chandrasekhar
The principal objective of the current government seems to be that of winning and sustaining the whimsical ‘confidence’ of foreign capital at all costs. This is the new and defining feature of economic policy of present day India.
Financial Convergence in Asia
05 September, 2012, C.P. Chandrasekhar & Jayati Ghosh
Even as there are dissimilar financial structures, the recent Asian experience with financial convergence suggests that financial proliferation largely facilitates new lines of business in financial services and affects the real economy more from the demand side by the debt-financed household expenditure it promotes. Thus excessive exposure to retail markets is becoming a source of fragility in these countries just as it did in the developed countries.
Ill Winds from Europe
08 August, 2012, C.P. Chandrasekhar & Jayati Ghosh
The crisis intensifies in Europe and threatens to trigger a second global downturn in five years. This time, Asian countries, which weathered the last crisis well, seem less resilient. In fact, the evidence points to many routes to the spread of contagion to Asia.
India's Growth Story Ends
06 June, 2012, C.P. Chandrasekhar
Even when confronted with slowing growth, the Indian government is adopting austerity measures that trap the country in a recession because of the accumulated presence of foreign finance in the country. The latter not only increases economic instability, but also induces an element of “policy paralysis”. Capital controls are a must to give policy manoeuvrability to the government.
Of Profits and Growth
29 May, 2012, C.P. Chandrasekhar & Jayati Ghosh
The period between 2002-03 and 2008-09 saw India’s economy grow at an unprecedented rate, with manufacturing too witnessing a revival. However, the rate of growth of the manufacturing sector would be reduced due to the effects of the recent developments of reduction and even reversal of foreign capital inflows, the liquidity crunch and the large scale corruption in India.
Can Asia Decouple?
22 February, 2012, C.P. Chandrasekhar & Jayati Ghosh
As the global economic situation worsens, there are renewed concerns about the fate of developing countries. The authors consider recent trends in global GDP growth, investment and trade, and argue that the expectations of Asia being able to blithely withstand the latest round of economic crisis are not just over-optimistic but probably wrong.
Behind the Fear of Debt
09 February, 2012, C.P. Chandrasekhar & Jayati Ghosh
Fears are being expressed in official policy circles that the country’s dependence on foreign debt as opposed to foreign investment to finance the external deficit is increasing, leading to specific policy responses. Recently the government has announced a policy allowing direct access of a new group of foreign investors into India’s equity markets. Although this measure is defended on the grounds that it would help reduce dependence on debt, its validity is indeed questionable.
Thirst for Foreign Capital
27 January, 2012, C.P. Chandrasekhar
Concerned about the fall in FII investments and the financing of the growing current account deficit, the government has allowed a new group of foreign investors to invest directly in India’s equity markets. To the extent that the measure is successful, it would mark a transition towards allowing greater presence of speculative players in the Indian markets.
India's External Sector
11 January, 2012, C.P. Chandrasekhar & Jayati Ghosh
Even before global currents caused relatively rapid outflows of mobile finance capital from India, the Indian economy was vulnerable on the external front. The recent pattern of growth that has been reliant on capital inflows to generate domestic credit-driven bubbles, rather than trade surpluses is not sustainable and makes the economy significantly more vulnerable.
European Banks and Asia
17 November, 2011, C.P. Chandrasekhar & Jayati Ghosh
European banks are being forced to take a haircut to deal with the region's crisis. Given their greater role in total international funding and the significant exposure of Asian financial systems to global capital, this raises concerns about the likely impact that the European banking crisis would have on Asia.
Employment Generation as an Economic Strategy for Uncertain Times
14 November, 2011, Jayati Ghosh
This is the acceptance speech made by the author at the award function of the ILO Decent Work Research Prize, 2010. Discussing the growing pressures in the current global scenario, she argues for a shift in macroeconomic strategy towards domestic wage- and employment-led growth as a means to sustainable growth, as well as an end in itself.
International Banks in Emerging Markets
02 June, 2011, C.P. Chandrasekhar & Jayati Ghosh
Early in May this year, India's central bank, the Reserve Bank of India, issued an unusual set of guidelines for foreign banks operating in the country. The notification stated: ''It has been decided that for all foreign banks operating in India, the CEO (chief executive officer) will be responsible for effective oversight of regulatory and statutory compliance as also the audit process and the compliance thereof in respect of all operations in India.''

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