What is really happening in Indian Manufacturing? C.P. Chandrasekhar & Jayati Ghosh

Data on organised manufacturing production do not really capture the impact of demonetisation and its effects on demand, but looking at some sub-sectors of consumer non-durable goods provides more insight. Indian_Manufacturing (Download the full text in PDF format) (This article was originally published in the Business Line on August 14, 2017.)

NPAs: All talk and no action C. P. Chandrasekhar

The media are full of it. Viral Acharya, a recently inducted Deputy Governor of the Reserve Bank of India (RBI), has declared publicly that resolving the problem of bank stress resulting from large non-performing assets (NPAs) on their balance sheets is the RBI’s priority, taking precedence over measures such as interest rate reduction to spur growth. The issue here is not just one of preventing bank insolvency, but of keeping the credit pipe open. Banks burdened with NPAs are likely to be less willing to expand their loan books, and if interest rates are too low, banks may be unwilling…

Growth in the Time of a Credit Squeeze C.P. Chandrasekhar and Jayati Ghosh

GDP growth figures for the last few years have camouflaged a deceleration in credit growth that has affected all but the retail loans segment quite adversely. Credit_Squeeze (Download the full text in PDF format) (This article was originally published in the Business Line on July 31, 2017.)

The Hamburg Fiasco C. P. Chandrasekhar

The summit of the leaders of G20 meetings that met in Hamburg early July was nothing short of a fiasco. Outside the meeting, the massive protest demonstration and the unwarranted aggression of a huge police force made clear that these leaders lacked legitimacy. Inside, all that could be achieved was a “unanimous” communique, in which in language rendered almost meaningless by diplomacy, the contrary opinions of the leaders, especially the differences between the US and the other 19, were spelt out. To the credit of the drafters of the declaration it must be said that they managed one half-truth at…

Demography and care in Europe: The impact of social relations C.P. Chandrashekhar and Jayati Ghosh

Trends in social relations are both affected by and impact upon economic changes. These in turn have an important bearing on desirable patterns of spending in the care economy, as suggested by an examination of recent marital trends in Europe. Demography_Europe (Download the full text in PDF format) ( This article was originally published in the Business Line on July 17, 2017.)

Justice in the Age of Finance C. P. Chandrasekhar

The big news late in June 2017 was that the Serious Fraud Office (SFO) in the UK had charged four former senior executives of Barclays bank, including its former chief executive, John Varley, with fraud committed almost a decade earlier, during the global financial crisis of 2008. This is the first chief of an institution embroiled in the 2008 financial crisis who faces criminal (as opposed to civil) proceedings. How long the investigation will take and what the punishment will be is yet to be seen. But being the first criminal prosecution of a small number of the large group…

China’s Labour Market Conundrum C.P. Chandrasekhar and Jayati Ghosh

Has China's labour market reached a point where long years of high growth have led to demand outstripping supply, resulting in a sharp rise in wages? China_Labour (Download the full text in PDF format) (This article was originally published in the Business Line on July 4, 2017.)

The Roots of the Agrarian Distress in India C.P. Chandrasekhar

The policy shifts of the reform era have not been in favor of agriculture. Trade liberalisation, deregulation and a greater role for market forces have not benefited the farmer, who is trapped in a persisting crisis. It is time for today’s policy makers to recognise their own disconnect, and learn from the evidence at hand. Agrarian_Distress (Download the full text in PDF format) (This article was originally published in the bloombergquint on June 27, 2017)

Crop Prices and Farmer’s Unrest C.P. Chandrasekhar and Jayati Ghosh

Distressed farmers are demanding loan waivers, but that should not deflect attention from what needs to be done and undone to address the roots of the agrarian crisis.Crop_Prices Crop_Prices (Download the full text in PDF format) ( This article was originally published in the Business Line on June 19, 2017.)

The Unsustainable US Recovery C. P. Chandrasekha and Jayati Ghosh

Even the limited and unsteady recovery of growth in the US a decade after the 2008 crisis is based on an increase in debt that renders it unsustainable. Unsustainable_US_recovery (Download the full text in PDF format) (This article was originally published in the Business Line on June 5, 2017)

Why workers lose C.P. Chandrasekhar

A long-acknowledged feature of global development since the 1970s is that in many countries—advanced and poor—those at the bottom of the income pyramid have benefited little, if at all, from whatever growth has occurred. One empirical outcome of that tendency has been a decline in the shares of labour in national income over time. While this has been noted earlier, it has become the focus of attention recently because of evidence of a popular backlash against globalisation as reflected in the Brexit vote in the United Kingdom, the Donald Trump victory in the United States, and the rise of Far-Right…

Where will Global Demand come from? C.P. Chandrasekhar and Jayati Ghosh

As the US reduces its role as engine of global demand, there are no signs that other economies will be able to pick up the slack. The mercantilist approach exemplified by Germany is creating net global slowdown. Global_Demand (Download the full text in PDF format) (This article was originally published in the Business Line on May 22, 2017)

Public Bank Privatisation in a Post-truth World C.P. Chandrasekhar

Narendra Modi government appears to have decided to privatise public sector banks (PSBs). Preparations are underway with arguments being marshalled that “there is no alternative” to privatisation. Privatisation (Download the full text in PDF format) (This article was originally published in the Economic & Political Weekly, Vol. 52, Issue No. 19, 13 May, 2017)

The Illusion of an Economic Spring C.P. Chandrasekhar

While policy makers, analysts and observers paint a picture of an ongoing global economic recovery, the numbers seem to drag the optimists down. Barely days after IMF Managing Director, Christine Lagarde, declared at the spring meetings of the World Banka and the IMF that, “Spring is in the air and spring is in the economy as well,” came bad news from the US. The advanced economy that was being looked to as the one that would pull the world system out of a decade long period of sluggish growth performed poorly in the first quarter of 2017, growing at an…

Lopsided Industrialisation C. P. Chandrasekhar & Jayati Ghosh

Recent trends in the organisational form of units in the registered manufacturing sector suggest that India’s factory sector is not just abnormal but backward to boot. Lopsided_Industrialisation  (Download the full text in PDF format) (This article was originally posted in the Business Line on May 8, 2017)

The De-digitisation of India C.P. Chandrasekhar and Jayati Ghosh

Despite the government's efforts to digitise the Indian economy forcibly, non-cash forms of payment appear to have declined as more currency has been made available to the public. This points to major flaws in the government's coercive approach and the underlying rationale for cashlessness. De_Digitisation_India  (Download the full text in PDF format) (This article was originally published in the Business Line on April 24, 2017.)

The State in Chinese Banking C. P. Chandrasekhar and Jayati Ghosh

After four decades of financial reform China’s banking sector is still dominated by publicly owned institutions. But continuity in ownership does not mean that banking behaviour does not change. Chinese_Banking (Download the full text in PDF format) (This article was originally published in the Business Line on April 10, 2017)

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…

ICT: Implications of imbalanced growth

An analysis of India's ICT performance suggests that software export success tends to hide both imbalances in production and their adverse balance of payments fall-out. ICT  (Download the full text in PDF format) (This article was originally published in the Business Line on March 13, 2017)

Wicked Loans and Bad Banks C. P. Chandrasekhar

The crisis created by non-performing assets (NPAs) on the balance sheets of commercial banks, especially public sector (PSBs), does not go away. It only intensifies. An environment that triggered large inflows of foreign capital and a surge in credit after 2003 encouraged banks to explore new areas and terms of lending, which are responsible for the large exposures that are now turning bad. Having encouraged that environment with its policies, the government had been pretending that the problem is not serious enough to warrant emergency action. The reason was that it wanted to do the impossible: resolve a big problem…

Budget 2017-18: The Macroeconomic Perspective C. P. Chandrasekhar

Even for those sceptical about the government’s declared policy intentions—varying from cleaning the Ganga to doubling farmers’ incomes by 2022—the subdued and insubstantial Budget 2017-18 was a surprise. The circumstances in which the Budget was presented were exceptional. In the midst of a slowdown in growth with signs of the onset of deflation[i], the government had chosen to withdraw and declare worthless more than 80 per cent of the value of currency in circulation by demonetising “higher value” notes. But new notes to replace the ones withdrawn were slow in coming and had to be rationed, because the indefensible measure…

Marital Breakdown in India C.P. Chandrasekhar and Jayati Ghosh

Although divorce rates are low in India, separation is the dominant form of marital dissolution, and this is especially problematic for women because of the uncertain legal status and lack of rights. Marital_Breakdown_India  (Download the full text in PDF format) (This article was originally published in the Business Line on February 27, 2017)  

Budget 2017-18: Blinded by neoliberalism C. P. Chandrasekhar

In an insipid speech that was repeatedly misread, Finance Minister Arun Jaitley presented on 1 February the contours of a budget that was shockingly short of substance. It left disappointed those who expected that policies to compensate sections hurt by the demonetisation experiment would be included and those who were looking for some measures to counter the demand slump afflicting the economy that had been aggravated by the demonetisation. It also surprised those who thought that the budget would be forced to expand aggregate expenditure and social spending to win voter support in the elections to the five assembly elections…

Interpreting The World To Change It Essays For Prabhat Patnaik; Edited By  C.P. Chandrasekhar And Jayati Ghosh

Interpreting the World to Change it Essays for Prabhat Patnaik; edited by C.P. Chandrasekhar and Jayati Ghosh

February 2017 • 6.25 x 9.5 inches • (xvi+284) 300 pages • Hardback •  ISBN: 978-93-82381-93-8 •  Rs 850 Prabhat Patnaik’s academic insights and strong political commitment have stimulated intellectual activity and inspired personal regard across a multitude of people from all walks of life. This volume brings together contributions from some who have benefited from interaction with him over decades, in a tribute and continuing conversation. Prabhat Patnaik, born 19 September 1945 in Odisha, India, is one of the outstanding economists of his generation and a leading Marxist theoretician in the world today. Versatile in his knowledge and mastery…

Bond Market Reversal C. P. Chandrasekhar and Jayati Ghosh

Post-Trump expectations of a shift back from an easy monetary policy with low interest rates to reliance on a fiscal stimulus for growth are reversing trends in global bond markets. Bond_Market_Reversal  (Download the full text in PDF format) * This article was originally published in the Business Line on February 13, 2017

Power: The web of debt C. P. Chandrasekhar

The state of Jharkhand has reportedly stopped payments to the Damodar Valley Corporation (DVC) for the 700 MW of power the later supplies it every day. The evident reason is that it has not been able to cover payments for the power it acquires from the generators and supplies to its customers, resulting in deficits that are covered with debt that it is no longer able to service. A consequence of this would be an inability to purchase power from the generators, increasing their losses and affecting the debt they in turn owe the banks. With this debt being a…

Spreading Light: Are the Modi government’s electricity promises being fulfilled? C.P. Chandrasekhar and Jayati Ghosh

The government's claim that it has ensured electricity for all does not seem to be warranted by the evidence. Spreading_Light  (Download the full text in PDF format) (This article was originally published in the Business Line on January 30, 2017.)

China’s Capital Flight Syndrome C.P. Chandrasekhar

China, now one of the world’s two largest nations measured by gross domestic product (GDP), is displa­ying a strange malady. A sudden and large outflow of capital from the country is resulting in a sharp fall in its reserves. Going by International Monetary Fund (IMF) statistics, between the quarter ending June 2014 and the one ending June 2016, China’s foreign exchange reserves fell by $752 billion, from $4.1 trillion to $3.3 trillion. According to recent reports, reserves had fallen further to $3.1 trillion by the end of October 2016. This collapse in reserves due to an outflow of capital is…

No Digital Base for a Cashless Economy C.P. Chandrasekhar

Prime Minister Modi is selling the idea that the engineered cash shortage that resulted from the disastrous demonetisation exercise is an opportunity to force-march India to being what is inelegantly termed a “less cash” society. In his view, that transition, if ensured, would for some inexplicable reason tame the rich and reward the poor. This new sloganeering of the Prime Minister and his government has given the “Digital India” mission a whole new dimension, with electronically-executed financial transactions and settlements becoming a means to realising larger economic and social objectives. Making this an immediate, or even medium term, objective is…

Trump’s Protectionist Charade C. P. Chandrasekhar

As January 20th, the day Donald Trump assumes his Presidency nears, the fear that he would turn US trade policy in a protectionist direction appears to increase. Protection against import competition and an attack on global relocation and outsourcing by American firms that are seen as destroying jobs in the US and immigration that is viewed as depriving the American working class of available livelihoods were central elements of the populist rhetoric that swung the white working class in Trump’s favour. Key items in Trump’s election campaign promise list were policies to recapture American jobs by clamping down on the…

Waning Stimuli C.P. Chandrasekhar and Jayati Ghosh

Banks strapped with stressed assets are holding back on lending, dampening in the process the principal stimulus to growth in recent years. And there are no alternative routes to growth in sight. Waning_Stimuli   (Download the full text in PDF format) (This article was originally published in the Business Line on January 16, 2017.)

The Growth of Digital Payments C.P. Chandrasekhar and Jayati Ghosh

In the context of the failed demonetisation and continued shortage of currency, the government continues to push cashless digital payments. What are the implications for Indians? Digital_Payments    (Download the full text in PDF format) (This article was originally published in the Business Line on January 2, 2017.)

Age of Uncertainty C.P. Chandrasekhar and Jayati Ghosh

With the US Federal Reserve deciding to exit the era of low interest rates even when growth in the rest of the world economy falters or remains sluggish, economic uncertainty intensifies. Age_Uncertainty (Download the full text in PDF format) (This article was originally published in the Business Line on December 19, 2016)

The Budget after Demonetisation C.P. Chandrasekhar

Having announced that it is advancing the date for presentation of annual budgets by a month from end-February, the Finance Ministry is in the midst of preparations for next year’s exercise. But with the attention of economic analysts diverted to the unfolding crisis created by the government’s demonetisation decision, little attention has been paid to what would be the first budget to be presented in the post-planning era. It was to be expected that the implicit and explicit rules adopted by the government to make allocations under different heads of capital and current expenditure would have attracted much attention. But…

Banks as victims C. P. Chandrasekhar

In the outcry against the disastrous demonetisation experiment of the Modi government one aspect that has not been given adequate attention is the damage it has done to the reputation and the balance sheets of the banks. Customers queueing before bank doors and ATMs seem on occasion more forgiving of the government than of the harassed bank employees, who are forced to ration out currency and offer those customers they can accommodate, less than even the maximum withdrawal permitted by the government and the RBI. When new notes are discovered in inexplicable sums in the hands of rogue operators, it…

Can Developing Asia Hold its Ground? C.P. Chandrasekhar and Jayati Ghosh

Capital flight from Asia points to investor concerns about both political processes in the big Asian developing economies and medium-term economic prospects. developing_asia_hold_ground (Download the full text in PDF format) (This article was originally published in the Business Line on December 5, 2016)

India’s Export Collapse C.P. Chandrasekhar and Jayati Ghosh

A peculiar combination of factors, besides the global recession, explains India's poor export performance in recent times. India_Export_Collapse (Download the full text in PDF format) (This article was originally published in the Business Line on November 21, 2016.)

Finance Capital and the Nature of Capitalism in India Today C.P. Chandrasekhar

A distinctive feature of the current phase of capitalism is the growing role of finance capital as an instrument to establish capitalist hegemony and facilitate the appropriation of surplus. In the developed countries this transition towards financial hegemony was the result of the inflationary crisis and stagnation that affected the OECD countries after the late 1960s. The contractionary fiscal and monetary policy response to inflation intensified the deceleration in real growth. This together with the low real interest rates on bank deposits adversely affected banking business and profits. These developments triggered a process of deregulation and liberalisation in the financial…

Demonetisation: All pain for the majority C. P. Chandrasekhar

At the time of writing, chaos continues to prevail at bank branches and ATMs across India, reflecting the larger truth that the government has for no sensible reason frozen a major part of India’s payments and settlements system. The government did this by declaring, for reasons wrong and indefensible, that currency notes of Rs. 500 and Rs. 1000 denomination which accounted for more than 85 per cent of the value of notes in circulation (and around 25 per cent in terms of sheer numbers) would not be legal tender within four hours of a dramatic speech by the Prime Minister…

Uncertain Media Future C. P. Chandrasekhar

In today’s troubled times, mega-mergers are the norm. Announcements of marriages like that between AB Inbev and SABMiller in the beer industry or Bayer and Monsanto in the agribusiness sector attract attention that soon fades, even as the difficult task of getting clearances from the regulators continues. But the just announced agreement to merge by AT&T and Time Warner, in a $85 billion deal, is likely to remain in public discussion for some time. If it does not, it should. This is a mega merger not just in any industry like the production of cigarettes or beer, but in the…

How successful is China’s Economic Rebalancing? C.P. Chandrasekhar and Jayati Ghosh

China's rapid economic growth has slowed recently - but does this reflect the desired rebalancing of the economy away from investment to consumption and wage-led growth? China_Economic_Rebalancing  (Download the full text in PDF format) (This article was originally published in the Business Line on November 8, 2016.)

How is India Inc Doing? C.P. Chandrasekhar

Growth in India’s non-financial corporate sector shrank in 2015-16, after three consecutive years of “steep moderation” according to the Reserve Bank of India (RBI). In its annual study of the Performance of the Corporate Business Sector, the RBI attributes this downturn to “lacklustre demand”, echoing the sentiments of many businessmen who have been unwilling to strongly articulate this perception in the face of the hype on growth fed by schemes like “Make in India” and “Start-up India”. But, actual trends in the economy do not seem to provide much ground for satisfaction, let alone celebration. One factor that tends to…

The Hegemony of Finance C. P. Chandrasekhar

Three parallel developments that caught media attention over the last month point to the restoration of the hegemony of Finance Capital in the years since the 2008 crisis. They also reveal the likely consequences of the neoconservative backlash, led by Finance, against post-crisis financial sector reform in the US and other developed countries. One was the decision of the Financial Sector Protection Bureau (FSPB) of the US, an institution created after the 2008 crisis, to arrive at a settlement with Wells Fargo (WF) in an investigation relating to a rather shocking discovery. More than 5000 employees of the bank had,…

Housing Market Frenzy in China C. P. Chandrasekhar and Jayati Ghosh

The urban housing market in China is experiencing a bubble that is driving property prices to unbelievable levels in some of the major cities. But the divergence in recent trends in house prices suggests that this bubble may soon burst. housing_market_china (Download the full text in PDF format) (This article was originally published in the Business Line on October 11, 2016-11-03)

Agribusiness: Consolidating against the farmer C. P. Chandrasekhar

In an acceleration of a trend towards mega-mergers in the agribusiness area, German pharma and agrochemicals major Bayer has announced an all-cash $66 billion deal to take over American seed major Monsanto. To clinch the deal, Bayer raised its initial bid thrice from $122 to $128 a share, to touch a level that implies a 44 per cent premium over Monsanto’s early-May stock market price. On the surface, the deal seems to bring together firms with activities that complement each other. Monsanto is a controversial seed company producing genetically modified seeds for different crops, while Bayer is focused on agricultural…

The Pulses Conundrum C.P. Chandrasekhar and Jayati Ghosh

As inflation in the prices of pulses gives way to a price decline, a misplaced argument that the government should not regulate the private trade to curb speculation and stabilise prices is being expressed. Pulses_Conundrum  (Download the full text in PDF format) (This article was originally published in the Business Line on September 26, 2016.)

Revving Up the Bond Market C. P. Chandrasekhar

In the final stretch of his tenure as Governor of the Reserve Bank of India, Raghuram Rajan chose to make one more effort at revving up India’s bond markets. A number of measures aimed at galvanizing the debt market, culled out of past studies and extended by the H.R. Khan Committee set up under Rajan, have been announced. These measures have also been welcomed by all those who see the absence of a vibrant corporate bond market as a major weakness of the Indian financial structure. The thrust of the measures is to expand the market for and increase the…

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…

Unexpected Inflation C.P. Chandrasekhar and Jayati Ghosh

The return of inflation, even if moderate, at a time when India is experiencing a normal monsoon and after a long period of inflation-targeted monetary policy is surprising. Unexpected_Inflation  (Download the full text in PDF format) (This article was originally published in the Business Line on August 29, 2016.)

Care Work as the Work of the Future C.P. Chandrasekhar and Jayati Ghosh

As technological change threatens many different kinds of jobs, the significance of direct face-to-face interaction required in much care work means that it is unlikely to be as adversely affected. What does this mean for the future requirements of care workers? Future_Care_Work (Download the full text in PDF format) (This article was originally published in the Business Line on August 15, 2016.)

Dangerous Embrace: India and International Finance Capital C. P. Chandrasekhar

Financial liberalization, aimed in the first instance at attracting foreign finance capital to India, is the centrepiece of the neoliberal growth strategy India chose to adopt 25 years back. That was indeed a dramatic change. In 1947, controls on and regulation of foreign investment were seen as prerequisites for ensuring autonomy from predatory foreign capital, and strengthening the political freedom that had been won. Since 1991, however, economic success has been measured by neoliberal advocates by the confidence that foreign investors have in the Indian economy, reflected in the volume of cross-border inflows of foreign capital, especially foreign finance capital.…

The Return to Retail Lending C.P. Chandrasekhar and Jayati Ghosh

After having retreated from retail lending in the years since 2005-06, banks burdened by NPAs in areas like infrastructure seem to be returning to the retail market. How far can this go? Retail_Lending  (Download the full text in PDF format) (This article was originally published in the Business Line on August 1, 2016.)

The Post-1991 Growth Story C. P. Chandrasekhar

July 1991 is widely seen as a watershed month in Indian economic policy making. That was when the Indian government openly declared that it was unwinding the interventionist regime which had been in place since Independence, involving controls on economic agents, regulation of markets, a large public sector and an a priori plan as to how economic resources should be allocated. In the period to follow, policy, it was then argued, would dismantle this excessively interventionist framework, and establish and support a system driven by private initiative and relatively unfettered markets, with minimal regulation and control. The State was to…

The Business of Wilful Default C. P. Chandrasekhar

In the fourth round of what has become a periodic exercise, the All India Bank Employees Association (AIBEA), the “oldest and largest” trade union in the industry, has released a list of 5,610 wilful defaulters on debt they owe commercial banks. In the AIBEA’s view the failure to reduce, let alone prevent, such defaults is badly damaging bank balance sheets. The fact that attempts at recovery have also been tardy and quite unsuccessful is not helping either. The official listing of suit-filed accounts of wilful defaulters disseminated through the Credit Information Bureau (India) Ltd, reports 6,081 cases involving loans totaling…

Why the European Union should be Even More Worried about Brexit C.P. Chandrasekhar and Jayati Ghosh

The economic pressures that may have driven the Brexit vote are also evident in other big European nations. So to survive, the EU must rethink its template for economic policies.   European_Union_Worried (Download the full text in PDF format) (This article was originally published in the Business Line on July 18, 2016.)

The Real Banking Problem C.P. Chandrasekhar and Jayati Ghosh

Recognizing bad assets and writing them off may not resolve the banking problem, since the new financial order requires banks to lend to those who seem more prone to default. Banking_Problem  (Download the full text in PDF format) (This article was originally published in the Business Line on July 4, 2016.)

The Global “New Normal” is Not New- But it is still a real concern C.P. Chandrasekhar and Jayati Ghosh

lobal growth rates of the last five years are similar to those in the past, but now they are accompanied by unprecedented monetary expansion that seems to have little impact. Global_New_Normal   (Download the full text in PDF format) ( This article was originally published in the Business Line on June 20, 2016.)

Bad Loans, Lending Behaviour and Growth C.P. Chandrasekhar and Jayati Ghosh

As interested observers focus on the bad loans, accumulating in the books of India’s commercial banks, the implications it has for lending behaviour and growth are less explored. Bad_Loans  (Download the full text in PDF format) (This article was originally published in the Business Line on June 6, 2016.)

The IMF’s Call for Complacence C. P. Chandrasekhar

A specter that haunts a number of so-called emerging markets, including India, is that of a sudden outflow of capital, either because of exit of foreign investors or because of the flight of resident capital. That fear has increased in recent times for two reasons. First, after capital inflows to these economies shrank during the crisis of 2008, they registered a sharp revival and then surged when large quantities of liquidity were infused into the world economy to save the banks and stall the downturn in the developed economies. This increased the stock of footloose capital in these economies, which…

And Now, Price Deflation in India and China? C. P. Chandrasekhar and Jayati Ghosh

Ever since the Global Financial Crisis, advanced economies have been grappling with the spectre of deflation. While this was very clearly a reflection of the downswing in economic activity in the aftermath of the crisis, such price deflation has proved remarkably impervious to the most expansionary monetary policies and liquidity expansion that the world economy has yet seen. This has had adverse consequences in terms of producers’ expectations, which in turn have kept investment low. It has not benefited working people because wages have stayed low or continued to fall. And it has generated tendencies of the debt deflation-type that…

A Picture of Inequality C.P. Chandrasekhar and Jayati Ghosh

The government's decision to release income class-wise details on tax returns allows an assessment of the extent of inequality in the distribution of income among tax payers. Picture_Inequality   (Download the full text in PDF format) (This article was originally published in the Business Line on May 9, 2016.)

When Commodity Prices Fall C.P. Chandrasekhar and Jayati Ghosh

The decline in primary commodity prices over the past four years particularly last year, shows that financialisation of commodities has amplified and exaggerated instabilities and fluctuations. Commodity_Prices_Fall (Download the full text in PDF format) (This article was originally published in the Business Line, April 25, 2016.)

On Data and Decision-making C.P. Chandrasekhar and Jayati Ghosh

Wide differences in official data based on series with different base years or from alternative sources lead to questions about their relevance for decision making. Data_Decision_Making  (Download the full text in PDF format) (This article was originally published in the Business Line on April 11, 2016.)

How much has Global Economic Power Really Shifted? C.P. Chandrasekhar & Jayati Ghosh

This article analyses the significance of shift in global economic power from the North to the South and what exactly it means for the countries in developing Asia like India. Global_Economic_Power  (Download the full text in PDF format) (This article was originally published in the Business Line on March 28, 2016.)  

Interest Rate Conundrum C.P. Chandrasekhar and Jayati Ghosh

With interest rates and bond yields turning negative in many developed countries, the efficacy of monetary policy as a counter cyclical instrument is in question. Interest_Rate_Conundrum  (Download the full text in PDF format) (This article was originally published in the Business Line print edition dated March 14, 2016.)

Is the Rupee “Weakening”? C.P. Chandrasekhar and Jayati Ghosh

While much concern being expressed about the weakening rupee, it is not the past record that is the problem; rather, its likely direction in the near future is a cause for worry. Rupee_Weakening  (Download the full text in PDF format) (This article was originally published in the Business Line, January 18, 2016.)