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

Once More on “The Humbug of Finance” Prabhat Patnaik

The renowned economist Joan Robinson had referred to the view that the government’s budget should always be balanced, as the “humbug of finance” (Robinson 1962), namely as a false proposition with no theoretical merit which was nonetheless promoted by finance capital. These days of course the insistence is not exactly on balancing the budget as was the case during the pre-second world war years. A certain amount of fiscal deficit relative to GDP, usually 3 percent, is considered “permissible”, though it is not clear what is so sacrosanct about the figure 3 and why 3 is better than zero. But…

Some Thoughts about Basic or Citizenship Income Gerry Rodgers

The idea that all citizens should receive an income, adequate to cover their basic living costs, without conditions, is not new. But it has in practice been a marginal, utopian idea without much political impact. In the past few years, however, it has received increasing attention. In a referendum on the subject in Switzerland it gathered a respectable although minority vote. One of the candidates for the French Socialist Party’s 2017 presidential nomination made it a central issue of his campaign. Green parties often favour the idea. There are a few local experiments under way. Advocates of the idea see…

Review of Kenneth S. Rogoff – The Curse of Cash Jayati Ghosh

Published by :Princeton University Press 2016     ISBN-10: 0691172137        ISBN-13: 978-0691172132 Kenneth Rogoff is among the more prolific and topical of US economists – and certainly no less controversial for all that. As former Chief Economist of the IMF, Rogoff was famously embroiled in a debate with Joseph Stiglitz, former Chief Economist of the World Bank, on the merits of and concerns about globalisation (of which he has been a fervent supporter). Subsequently, he has waded into many issues of current concern with a mix of theoretical and empirical analysis and strong policy conclusions. Perhaps unremarkably given the state of academic…

Review Of Kenneth S. Rogoff – The Curse Of Cash Jayati Ghosh

Supreme Court should Frame an Eleventh Question on Demonetisation Prasenjit Bose and Zico Dasgupta

Whether the demonetisation scheme declared through the November 8 notification qualifies as a fiscal or economic policy is a vital question that merits the attention of the Supreme Court. SC_Questions_Demonetisation (Download the full text in PDF format) (This article first appeared in

Structural Change Servaas Storm

There has been a renewed interest in industrialization and structural change in the mainstream of development economics, which, however, doesn’t imply a rejection of the neoliberal approach to development; the default recommendation is still the market and static comparative advantage and the main task of governments is to impose institutional reforms and improve governance. structural_change (Download the full text in PDF format) (This article was originally published in Development and Change, by International Institute of social Studies, The Hague)

Wage and Fiscal Policies for Economic Recovery Jomo Kwame Sundaram and Anis Chowdhury

The new US census data released in late September show that 3.5 million people in the US climbed out of poverty, as the tepid economic recovery continues. Employers are finally creating more jobs and paying higher wages than seven years after the Great Recession started following the 2008 financial crisis. This progress, while modest, debunks the claims of those who predicted a dire outcome following the increase in the legislated US minimum wage, especially without a robust recovery. The data show large employment and wage gains, particularly for the lower end of the jobs spectrum. Raising the legal minimum-wage and…

Pensions for All Jomo Kwame Sundaram and Rob Vos

October 1st is the International Day of Older Persons. Just another day? Perhaps, but it should remind us that the world’s population is ageing, brought about by the combined effects of declining mortality and fertility rates and longer longevity. By mid-century, one out of five people will be over 65 compared to over one in ten now. This is dramatic enough. What is equally compelling is that eighty per cent of older persons in the world will be living in developing countries by then – within two generations. This ageing of the world’s population is one of humanity’s major achievements.…

Growing Inequality: Cause and Consequence of Financial Crisis Mah-Hui Lim

Rising inequality is among the root causes of the recent global financial crisis; and quantitative easing, the pill that was supposed to be the cure, has not only been ineffective but also has produced unintended consequences of rising inequality. growing_inequality (Download the full text in PDF format) (Mah-Hui Lim was formerly a post-doctoral fellow at Duke University and Assistant Professor at Temple University in the US, and an international banker. He serves as a city councillor in Penang island, Malaysia.)  

An Overburdened Instrument C. P. Chandrasekhar

On August 9, RBI Governor Raghuram Rajan released the last bi-monthly monetary policy statement that would be drafted under his leadership. No changes were made: the benchmark ‘repo’ rate was kept at 6.5 per cent, the cash reserve ratio at 4 per cent and the Statutory Liquidity Ratio at 21.5 per cent. According to the RBI, growth in this fiscal is projected at 7.6 per cent because of the beneficial effects of the good monsoon and the expansionary effects of the implementation of the 7th Pay Commissions recommendations. So growth is not an immediate problem. But, in the view of…