Emerging Markets at Risk Again Jomo Kwame Sundaram

Emerging market governments often draw lessons from previous financial crises – or at least claim to do so – to prevent their recurrence. However, such preventive measures are typically designed to address the causes of the last crisis, not the next one. Hence, some measures adopted may inadvertently become new sources of instability and crisis. Very rarely are the root causes of crises and vulnerability addressed. In their efforts to prove themselves as worthy emerging markets, they tend to be pro-active in joining the financial globalization bandwagon. But premature financial liberalization – with hasty integration into the international financial system,…

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.)  

The Heavy Price of Economic Policy Failures Jayati Ghosh

A lot of the media discussion on the global economy nowadays is based on the notion of the “new normal” or “new mediocre” – the phenomenon of slowing, stagnating or negative economic growth across most of the world, with even worse news in terms of employment generation, with hardly any creation of good quality jobs and growing material insecurity for the bulk of the people. All sorts of explanations are being proffered for this state of affairs, from technological progress, to slower population growth, to insufficient investment because of shifts in relative prices of capital and labour, to “balance sheet…

The Continuing Debt Problem in Asia C.P. Chandrasekhar and Jayati Ghosh

Private household debt is going to be a major concern for many Asian economies as excessive household debt and falling realty prices combine to create a potentially potent mix. Continuing_Debt_Problem (Download the full text in PDF format) (This article was originally published in the Business Line print edition dated December 8, 2015)

No Case for Complacence C. P. Chandrasekhar

Though restricted to a single day, the 1625-point collapse of the Sensex on 24 August 2015, which was the largest single-day decline in six years, appears to be a signal that all is not well with the Indian economy. More troubling is the steep depreciation of the rupee from Rs. 63.8 to Rs. 66.7 to the dollar over the fortnight ending August 25. The government has tried to brush these developments under the carpet claiming that the disease is global and the Indian economy is strong enough to resist contagion. All that is needed is to stick with reform, it…

Emerging markets in retreat Jayati Ghosh

Whatever happened to emerging markets? For a while it looked like they had secure and buoyant futures, regardless of the travails of advanced economies. Global investor interest focussed on varied countries grouped by acronyms like BRICS and MINTs that sometimes even led to institutional tie-ups. There was much trumpeting of their advantages, like the demographic bulges producing young populations, without considering how that could lead to disaster if employment did not increase in tandem. Few asked about the nature of the growth, or whether it could last. The euphoria spread, leading to large private capital inflows that pushed up asset…

An Asian Crisis Now? C.P. Chandrasekhar

While the world’s attention is focussed on the continuing crisis in Europe and its global fall-out, another crisis is brewing in Asia. More than one Southeast Asian country, among those that were overcome by financial crises in 1997, has seen a substantial accumulation of private debt, especially household debt. In some, debt levels are high enough to fear a financial collapse. This has come as a surprise, given the resilience they showed at the time of the global crisis of 2008. Worst off is South Korea, the rags to riches miracle that is now a member of the OECD, the…

Shifts in the Global Economy Jayati Ghosh

Two thoughts dominate in the global financial press in these uncertain times. The first is the growing concern, even fear, about immediate economic prospects, with the almost certain likelihood of another major financial crisis looming if, not already upon us. The Euro area is apparently unable to resolve the problems of imbalance and debt in the peripheral countries, which now threaten the profitability and even viability of major banks in the core countries. The United States is so hamstrung by its complex political process that the government is unable to take any meaningful measures to prevent the economy from falling…

Employment shifts after the Global Crisis C.P. Chandrasekhar and Jayati Ghosh

For more than a year now, it has been evident that the ''recovery'' from the Great Recession, which has been visible if sputtering in terms of output growth in the core capitalist countries, has not delivered anything like the increases in employment that were expected. A recent report of the ILO (''Short-term employment and labour market outlook and key challenges in G20 countries'', ILO and OECD September 2011, page 1) points out: ''With economic activity slowing in several major economies and regions, earlier improvements in the labour market are now fading, hiring intentions are softening and there are greater risks…

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