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Bleeding Heart

Indian financial code: real risk of financial capture

The biggest risk that the draft financial code poses to Indian economic and financial stability is that it vests tremendous powers in the executive branch of the government. India’s factor markets are broken. Land acquisition is next to impossible. Labour market reforms are threatened by a coalition of international agencies and molly-coddled labour unions. Banks have […]

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The ‘Troika’ goal is not Grexit from EMU but Syrexit from Greece

Unless timely financial assistance is forthcoming, Greece will default on its payment and this might trigger a process of reactions and actions . In January, Greece elected a left-of-centre political party, Syriza, to office. Syriza has pledged to repudiate the debts it owed to international creditors and relax the fiscal austerity programme it had been […]

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The incredibly myopic fund

Prosperity has dulled the appetite for the heavy-lifting and pain-bearing required to restore sustainable economic growth in the world. It was an eventful week for the world economy. First, OECD slashed its global growth forecast for 2015 from 3.7 percent to 3.1 percent but kept its forecast for 2016 at 3.8 percent. Everything will always […]

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China currency devaluation – matter of when and not if

India is not ready to step in as China’s economic engine stutters and stops. In October 2014, the Takshashila Institution published a discussion document on the China outlook for 2015. Events have followed that pattern that the document anticipated. China’s economy is slowing and the domestic economy is not rebalanced. Net exports constitute an increasingly larger share […]

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Lessons from the AIIB saga

The AIIB saga is an evolving story and hence the lessons too will keep evolving. The story of how Britain, overruling objections from the United States, announced its intent to join the Asian Infrastructure Investment Bank (AIIB), being promoted by China, ahead of other European nations is so fascinating that it should be made into […]

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What is the defining legacy of the Indian budget 2015-16?

Examining the budget for its revenue and expenditure projections and other announcements. Analysing and Indian budget is a tricky job. At its core, it is a statement of government revenue and expenditure. At another level, it is a statement of economic policies of the government. Governments, over the years, have used the occasion of the […]

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ECB launches (or joins) World War III

The European Central Bank has rung the bell on the last act for both paper currencies and for modern central banks. ON 22 January, Mario Draghi, the President of the European Central Bank (ECB) announced a new programme of asset purchases. This is not the first time that ECB will be buying debt securities. However, this […]

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An epitaph for central banking

The world needs to be prepared for the possibility that from 2015 onwards, global growth disappoints and asset markets become increasingly volatile as a prelude to commencing their long overdue decline.  IMF revises global growth down The International Monetary Fund (IMF) cut the global GDP growth forecast for 2015 by 0.3 percent from 3.8 percent […]

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Modinomics and not Reaganomics

India needs contextual and not ideological policy-making. This piece is not a review of Professor Ha-Joon Chang’s book, 23 things they don’t tell you about capitalism. It merely draws heavily from it. In this book published in 2010, Ha-Joon argues that capitalism was a bad way to organise an economic system but for all others. […]

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Investors continue to whistle in the dark

Investor attitude means that the next financial crisis could be worse than 2007-09 in some ways. Things are moving fast on the world political stage. Now, Islamic insurgents are threatening to overrun the elected government in Iraq. IF press report are correct, Iran and the US are on the same side of the fence, in […]

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