governance, political economy, institutional development and economic regulation
The Reserve Bank of India has an impossible task. It must contain inflation without compromising growth, using four arrows in its quiver- setting domestic interest rates; managing liquidity; using its foreign exchange war chest to fight exchange rate volatility and the mandate to regulate banking operations-the last being an atypical central bank function. It can […]
Read More Monetary Policy needs a supportive fiscal PolicyEconomic decision makers face a problem. They make tradeoffs between alternative solutions but very few are win-win. Most involve optimizing for economic harm against benefits. Sadly, quantifying tradeoffs remains captive to data and computing constraints in these pre-quantum computing times. The fallback is to rely on gut instincts, ideology, or copycat solutions- none of which […]
Read More India: Taming inflation without hurting growthThe Reserve Bank of India-led Monetary Policy Committee (MPC) brewed a storm in a teacup by continuing its accommodative monetary policy stance—retaining the Repo rate (the cost of borrowing from the RBI) at 4 percent and the Reverse Repo (the cost of depositing funds with the RBI) at 3.35 percent. The MPC is a device, initiated in […]
Read More Storm in India’s monetary tea cup
Opinion India 