The Offensive against Transfers to the Poor Prabhat Patnaik

The corporate magnates who have financed Narendra Modi’s election campaign (the money spent by him on media promotion alone is estimated to be Rs.5000 crores) are now getting ready to claim their booty. This consists not only in the direct gains they demand, but also additionally in the rolling back of the few relief measures for the poor, such as the MGNREGS, which had been implemented especially during the UPA-I under Left pressure, and which cannot compensate in any case for the damage done to their living conditions by the current inflationary recession. An intellectual climate is being created in…

Why has this Recession not Produced a Price Deflation? Prabhat Patnaik

A striking difference between the Great Depression of the 1930s and the current world recession is that unlike then there has been no absolute price-fall this time, which is significant because such a price deflation makes recovery difficult. There are two reasons why this is so. First, a price deflation raises the real interest rate above the nominal interest rate, i.e. the rate in money terms. If the latter is 2 percent and prices are falling at 3 percent, then the real interest rate is 5 percent. Since recovery from a recession requires a revival of investment, which depends on…

The Political Economy of Indian Food Exports C.P. Chandrasekhar and Jayati Ghosh

The article discusses the political economy configurations that permit rising grain exports from India, even as domestic food prices spiral out of the reach of ordinary people. Food_Exports (Download the full text in PDF format) (This article was originally published in the Business Line, April 1, 2013)

The Coming Food Crisis C.P. Chandrasekhar

For the third time in five years the world is braced for another food crisis. Bad weather conditions are leading to projections of major production shortfalls in some the world’s leading food suppliers. Substantially reduced access and sharp price increases are, therefore, expected to keep food out of the reach of a larger proportion of the world’s population. The last two crises, in 2007-08 and 2011, led to food riots in many countries. So it is not just high food prices, increased hunger, localised famines and widespread increase in deprivation that are possibilities. Given the fact that the current food…

Macroeconomic Impacts of Commodity Price Volatility: G20 report Aldo Caliari

The G20 has recently come up with a report on the macroeconomic impacts of excessive commodity price volatility on growth. This study has concluded that excessive volatility creates uncertainty over future price levels, and complicates long-term planning and investment which leads to producers and consumers of commodities underinvesting in physical assets that support growth. This commentary highlights the key features and important findings of this report. G20_Report (Download the full text in PDF format)

Super-cycles of Commodity Prices Since the Mid nineteenth Century Bilge Erten and Jose Antonio Ocampo

In this article, the authors run empirical analyses of real commodity prices to show four super-cycles over 1865 to 2009. Non-oil price super-cycles follow those of world GDP, indicating that they are essentially demand determined. In contrast, causality runs in the opposite direction for oil prices. Moreover, the mean of each super-cycle of non-oil commodities is generally lower than that of the previous cycle suggesting a step-wise deterioration in support of the Prebisch-Singer hypothesis. super_cycles (Download the full text in PDF format) (This Article is originally published in

The Dragon’s Shadow Jayati Ghosh

On October 10, the Chinese government announced that it will increase its stakes in the four largest commercial banks, which are already largely public-owned. The move is designed to ''support the healthy operations and development of key state-owned financial institutions and stabilise the share prices of state-owned commercial banks''. But why was this move considered necessary at all? Recently, investors have been dumping Chinese bank shares, anticipating a slowing down not just of the economy as a whole, but in particular the property market, which had experienced a bubble of massive proportions. But the underlying concern about the health of…

India’s Role in the New Global Farmland Grab: An examination of the role of the Indian government and Indian companies engaged in overseas agricultural land acquisitions in developing countries Rick Rowden

This report explores the role of Indian agricultural companies that have been involved in the recent trend in large-scale overseas acquisitions of farmland. In addition to examining the various factors driving the “outsourcing” of domestic food production, the report also explores the negative consequences of such a trend. It looks at why critics have called the trend “land grabbing” and reviews the impacts on local peoples on the ground, who are often displaced in the process. india_role (Download the full text in PDF format)

Is China next? C.P. Chandrasekhar

Though different, the Greek and the US public debt crises threaten a return to the Great Recession of 2008. The world is therefore savouring the reprieve provided by their temporary resolution. But before that ephemeral benefit could be enjoyed comes news of a potential new global economic threat from an unsuspected source: China. Its source lies in the boom in China's property market over the last few years, which gathered substantial momentum in the wake of the huge post-crisis stimulus provided by the government to the economy. With a significant share of that stimulus diverted to projects that increased demand…

Global Oil Prices Jayati Ghosh

widespread perception that the cartel of oil-exporting countries can manipulate and influence the price by changing the level of their own supplies. As a result, even oil-exporting countries that are not members of the cartel have benefited from OPEC's decisions about supply, since they have also been beneficiaries of rising oil prices. But in fact, OPEC is more like a club of a minority of oil producers, rather than a cartel that is in command of world oil supply. It controls less than 40 per cent of world oil production, compared to 70 per cent in the early 1970s. Non-OPEC…