Reflections on the Old and New Developmentalism Jan Kregel

New Developmentalism incorporates the positive contributions of early development theorists into the future point of view. This assessment points to the importance of and problems relating to exchange rates in the development process and attempts to provide a contemporary version of the theory, adapted to the twentieth century world of globalization and financialization. Old_New_Developmentalism (Download the full text in PDF format) (This article was originally published in the Brazilian Journal of Political Economy, vol. 38, nº 1 (150), pp. 70-75, January-March/2018)

A Note on Estimating Income Inequality across countries using PPP Exchange Rates Jayati Ghosh

The use of exchange rates based on Purchasing Power Parities to compare income across countries and over time has become standard practise. But there are reasons to believe this could lead to excessively inflated incomes for poor countries and in some cases also inflate the extent of real changes over time. Estimates of gross domestic product growth in Chinese and Indian economies in recent years provide examples of this. ELRR_PPP_Exchange_Rates (Download the full text in PDF format) (This article was originally posted in the Economic and Labour Relations Review on January 30, 2018.)

Do Purchasing Power Parity exchange rates mislead on incomes? The case of China C.P. Chandrasekhar and Jayati Ghosh

Ever since Robert Summers and Alan Heston produced what become known as the “Penn World Tables” comparing prices and thereby the purchasing power of currencies across countries, the urge to use some deflator of market exchange rates to compare incomes across countries has been strong. The economic theory behind this is that exchange rate comparisons of less-developed economies consistently undervalue the non-traded goods sector, especially labour-intensive and relatively cheap services, and therefore underestimate real incomes in these developing economies. In some cases, this can be quite significant. In larger emerging markets like China and India, the conversion factors have been…

Asymmetric Exchange Rate Policy in Inflation Targeting Developing Countries Ahmet Benlialper, Hasan Comert and Nadir Ocal

Most of the developing countries that adopted inflation targeting experienced large appreciations in their currencies before the global crisis. This paper examines whether central banks in developing countries have different policy stances with respect to depreciation and appreciation in order to hit their inflation targets. 01_2017  (Download the full text in PDF format)

The Fall of the Rupee Prabhat Patnaik

At the end of the nineteenth century, Oscar Wilde in his famous play The Importance of being Earnest had talked of the precipitous fall in the value of the Indian rupee. Well over a century later alas, the Indian rupee is still falling, its latest fall as precipitous as any in Oscar Wilde’s time. On July 12, 2011, the exchange rate was 44 rupees to a US dollar; by end-June 2013, it has plummeted to 60 rupees per US dollar, a 27 percent decline in two years. The Government has attributed this decline to the fact that Ben Bernanke, the…

Tackling the World Recession John Grieve Smith

Few now doubt that the turbulent international situation has exacerbated and economic slowdown already underway across the advanced economies. The threat of recession has also led some to suggest that the pendulum might be ready to swing back from the monetarist and neoliberal consensus of the late twentieth century to a modernised and internationalist Keynesianism for the twenty-first. John Grieve Smith takes stock of these shifts, arguing that while the US has shown encouraging signs, EU and UK policymakers are still too wedded to the deflationary bias of the past. Furthermore, the paper argues, the mood for "re-ordering the world"…