The End of Globalization? Prabhat Patnaik

Donald Trump’s recipe for reviving employment in the U.S. economy is to impose restrictions on imports from other countries. If at the same time he had taken steps to increase the level of aggregate demand in the U.S. in other ways, such as through increasing State expenditure financed by a fiscal deficit, then restricting imports from other countries would not lead to a reduction in the magnitude of such imports in absolute terms. It would not, in such a case, cause any unemployment in other countries for the sake of boosting employment in the U.S. Put differently, it would not…

Negative Interest Rates: A symptom of the crisis or instrument for recovery C.P. Chandrasekhar

The failure of the macroeconomic stance of shifting away from fiscal policy to an almost exclusive reliance on monetary policy has led to the phenomenon of negative rates in countries other than the United States, and the first sign of even a partial recovery in that country has been enough to set off a reversal. negative_interest_rates (Download the full text in PDF format) This article was originally published in the Economic & Political Weekly, March 25, 2017 vol. LII no. 12

Interpreting Trump’s Trade Diplomacy C.P. Chandrasekhar

As Donald Trump settles into his Presidency and his surprise economic appointees begin to travel the world, signals as to what the external economic agenda of the United States would be during Trump’s term are emerging. One such signal was the unwillingness of the US Treasury Secretary, Steven Mnuchin, while attending the G20 summit of finance ministers and central bankers at Baden Baden over 17-18 March, to accept the old normal that any departure from global free trade was taboo. Conventionally, every communique from G 20 summits since the first in 2008 had committed to “resist all forms of protectionism”.…

The Rise and Fall of South Korea’s Chaebols C. P. Chandrasekhar

No discussion of South Korea’s dramatic transition from a poor underdeveloped country to a developed country member of the OECD club of rich nations can ignore the role of the chaebols—its ‘clans of wealth’. Consisting of a large number of legally independent firms controlled by a single family dominated-decision making centre (very much like India business groups), these Korean conglomerates grew rapidly during the regime of General Park Chung-hee (1961-1979), and today the top 10 of them earn revenues that are equivalent in value to around 80 per cent of the country’s GDP. For long credited as having implemented the…

Bad Bank Proposal for India T Sabri Oncu

The author’s bad bank proposal for India would be capitalised with zero coupon perpetual bonds the government would issue and would give the country some breathing time so that she can attack and tackle all her other problems. Bad_Bank_Proposal (Download the full text in PDF format) (This article was originally published in the Economic & Political Weekly, Vol. 52, Issue No. 10, 11 Mar, 2017.)

Understanding Economic Development and Demolishing Neoliberal Development Myths Erik Reinert, Jayati Ghosh and Rainer Kattel

We have recently co-edited a book (The Handbook of Alternative Theories of Economic Development, Edward Elgar 2016, also available as an e-book on http://www.ebooks.com/95628740/handbook-of-alternative-theories-of-economic-development/reinert-erik-s-ghosh-jayati-kattel-rainer/) that seeks to bring back the richness of development economics through many different theories that have contributed over the ages to an understanding of material progress. The underlying approach is based on this quotation from nearly four centuries ago: “There is a startling difference between the life of men in the most civilised province of Europe, and in the wildest and most barbarous districts of New India. This difference comes not from the soil, not from…

“Government by Discussion” Prabhat Patnaik

Professor Amartya Sen in his new book Collective Choice and Social Welfare which is a considerably expanded and updated version of his 1970 book with the same title, emphasizes that democracy must be understood as “government by discussion”. The idea of democracy being “government by discussion” really belongs to John Stuart Mill, though this particular phrase was coined by Walter Bagehot. The appeal of the idea lies in the fact that if government decisions are taken after public deliberations, then their opaqueness disappears; associated with it is a narrowing of the gap between those who “govern” and those who are…

Euroland: Will the Netherlands be the next domino to fall? Servaas Storm

The Dutch go the polls on March 15, a few weeks ahead of the French vote to choose the successor to Président François Hollande and well before Bundeskanzlerin Angela Merkel seeks a fourth term in September. The Dutch vote takes on a wider European significance, however, because Dutch voters — who rebelled against a EU ‘constitution’ in 2005 and last year rejected the association treaty between the EU and Ukraine in a referendum — have in the past proved to be a good gauge of European sentiment. Click to read the full article