
Here is my Mint op-ed on the challenge posed by widening inequality and opportunity presented by urbanization on India's economic growth.
"When economic growth is stalled, the US debt overhang may trigger an increase in inflation of about 5 percent for several years. This additional inflation would significantly reduce the debt ratio, even with some shortening of debt maturities... a moderate inflation of 6 percent could reduce the debt/GDP ratio by 20 percent within 4 years."
"Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments."
Visualizing empires decline from Pedro M Cruz on Vimeo.
"Contrary to the predictions of standard theoretical models, non-industrial countries that have relied more on foreign finance have not grown faster in the long run. By contrast, growth and the extent of foreign financing are positively correlated in industrial countries... the reason for this difference may lie in the limited ability of non-industrial countries to absorb foreign capital – especially because of the difficulty their financial systems have to allocate it to productive uses, and because of the proneness of these countries to exchange rate appreciation (and, often, overvaluation) when faced with such inflows... there is no evidence that providing additional financing in excess of domestic savings is the channel through which financial integration delivers its benefits."
"We see a photograph based on our beliefs – what we believe about the photographer’s intentions, our political beliefs, and the context in which the photograph appears. Think of all the ways the meaning of a photograph can change. The photographer takes a picture; a journalist writes a caption; the picture appears in an article; it is cropped or appears with other images (which skew the meaning); or it appears in a publication with known (or suspected) political sympathies; often photographs that seemingly express a point of view that we don’t like are seen as propaganda. And photographs that seemingly express a point of view that we do like are seen as journalism. People rarely find fault with photographs that accord with their own beliefs."
"The WPI non-food inflation rate to rise sharply to 4.7% year-on-year by March 31, 2010, compared with –2.9% year-on year during the week ended October 17, 2009. Moreover, with rising oil prices, the working capital demand of oil companies is also likely to pick up to the extent the government refrains from increasing domestic fuel prices. Recovery in corporate capital expenditure will also support the credit demand over the next 12 months. Early signs from fund-raising activity of the corporate sector indicate that capital expenditure is about the bottom. With industrial production growth likely to remain, increased capacity utilisation will mean higher investments by the corporate sector supporting the recovery in credit growth."
Correlation (using a rolling sample beginning one year before indicated date) between returns on oil and specified commodity. Source: Tang and Xiong (2009).
Weekly U.S. crude oil ending stocks, excluding SPR, in thousands of barrels, from EIA. Black line: average over 1990-2007. Red: 2008. Green: 2009.
1. For as little as 50 cents per child per year, deworming of children through mass school-based programs can cut school absenteeism by a quarter.
2. It costs no more than $2.25 per child per year to provide remedial education to children who lack basic reading skills.
3. Doing away with small user fees on bednets to make them available for free to pregnant women and mothers in health clinics costs less than $5 per net and can increase uptake by 75 percent.
4. Quotas for women in politics costs practically nothing. Yet, it increases women’s political participation and shift spending towards women’s priorities, such as clean water.
5. It costs $4 per girl per year to provide free primary school uniforms that help keep girls in school and reduce teen pregnancies by 9 percent.
6. Smart subsidies to farmers boost technology adoption, farm productivity and income. Time-limited offers to purchase fertilizers in the harvesting season, with free delivery in the planting season, can massively increase uptake and usage of fertilizers.
7. Small incentives - such as a bag of lentils per shot - can be a minor additional price to pay to get children immunized.
"The Committee... continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
"Bank of Canada lowers overnight rate target by 1/4 percentage point to 1/4 per cent and, conditional on the inflation outlook, commits to hold current policy rate until the end of the second quarter of 2010."
"Make an explicit statement that may have a substantial impact now with the risk of problems in the future, or avoid the risk and make a more cautious statement that may have only a marginal impact".
"We find little to suggest that the announcement of a fixed end date has significantly affected expectations of future monetary policy in Canada. It seems that market participants see little difference between the US phrase "extended period" and Canada's conditional commitment to keep rates fixed for a specified period."