Criticism and Criticism
Dec 28th 2018, Prabhat Patnaik

The Modi government's demonetization move has been universally criticized, but there are significant differences between a neoliberal critique focused on the impact on GDP and the Left's assessment that looks at the impact on people.

The Government-RBI Stand-off
Nov 6th 2018, Prabhat Patnaik
The current discourse around government-RBI relations suggests as if there are only two choices, one where market determines RBI policy and the other where government determines RBI policy. However, the root of the problem lies in the structure of the neo-liberal regime itself, which allows too few policy instruments to achieve a number of objectives.
India's Central Bank and Finance Ministry Must Introspect Before Rushing to Battle
Nov 5th 2018, Sunanda Sen
The conflict represents the need for an honest attempt to identify lapses in financial governance and remedies that do not encroach on each other's responsibilities as well as rights.
Can the RBIís open Market Operations help the Rupee? 
Oct 10th 2018, C.P. Chandrasekhar and Jayati Ghosh
The rupee's slide raises the question of whether India's central bank should intervene by selling dollars to prop up the currency. But past experience of such efforts has yielded mixed results, so other measures may be necessary.
Ostrich-like in Peacock Nation
Oct 1st 2018, C.P. Chandrasekhar
In the midst of a crisis reflected in a collapsing rupee, India's BJP government is acting ostrich-like, burying its head in the ground. Nothing illustrates this better than its much-delayed response to the collapse of the rupee with a set of measures that are the opposite of what is needed.
The Fall of the Rupee
Sep 25th 2018, Prabhat Patnaik
Falling rupee requires immediate government action. Awaiting an equilibrium that never comes would not only keep squeezing the working people but would eventually make the government run to the IMF and other financial institutions in panic. Measures like raising interest rates, fiscal compression, and using foreign exchange reserves have their own fallouts. There have to be direct restrictions on inessential imports combined with some controls on capital outflows.
The Indian Economy in A Tailspin
Sep 24th 2018, Prabhat Patnaik
A combination of direct import controls on inessential items, reduction of petro-product prices, measures for reducing the consumption of such products, and direct taxation, especially on wealth, is the obvious way of getting out of the tailspin in which the Indian economy is currently caught. There is no alternative to these measures if we are to avoid the fate of countries that eventually run to the IMF and get caught in the vice-like grip of "austerity".
Foreign Investor Appetite
Sep 14th 2017, C. P. Chandrasekhar and Jayati Ghosh
A brief decline in portfolio inflows into equity markets has raised the question whether foreign investment flows into India have peaked. The evidence of investments in debt markets suggest otherwise. That, however, need not be all good news.
NPAs: All talk and no action
Aug 4th 2017, C.P. Chandrasekhar
The problem of large NPAs of nationalised banks can be traced to the neoliberal reforms in the financial sector and outside, which prevent large government investments in infrastructure and capital-intensive industries that are imperative for development but too difficult a responsibility for the private sector to shoulder.
Growth in the Time of a Credit Squeeze
Aug 1st 2017, C.P. Chandrasekhar and Jayati Ghosh
GDP growth figures for the last few years have camouflaged a deceleration in credit growth that has affected all but the retail loans segment quite adversely.
Wicked Loans and Bad Banks
Mar 8th 2017, C.P. Chandrasekhar
A trail of defaults is ensuring that the NPA ratio is not stabilising, as the RBI expected it would, once assets misclassified as restructured and standard are recognised as non-performing.
Interest Rates and the Use of Cash
Feb 14th 2017, C.P. Chandrasekhar and Jayati Ghosh
It is ironic that under the most advanced form of capitalism today demands are being made which would push us back into the age of gold-money from where mankind had begun its journey into the realm of money.
Bond Market Reversal
Feb 14th 2017, C.P. Chandrasekhar and Jayati Ghosh
Post-Trump expectations of a shift back from an easy monetary policy with low interest rates to reliance on a fiscal stimulus for growth are reversing trends in global bond markets.
The Budget after Demonetisation
Dec 21st 2016. C.P. Chandrasekhar
If the government adheres to its deficit targets, this could imply a substantial cut in capital expenditures or social expenditures or both which would worsen the contraction set off by demonetisation.
Supreme Court should Frame an Eleventh Question on Demonetisation
Dec 15th 2016. Prasenjit Bose and Zico Dasgupta
Whether the demonetisation scheme declared through the November 8 notification qualifies as a fiscal or economic policy is a vital question that merits the attention of the Supreme Court.
Rajan's Exit
Sep 15th 2016, Prabhat Patnaik
The reason for the government's dithering over an extension of Raghuram Rajan's term, which led to his decision not to ask for one, cannot be attributed to his stance on interest rates.
An Overburdened Instrument
Sep 7th 2016, C.P. Chandrasekhar
The interest rate that is seen as being the principal instrument for macroeconomic management is proving to be a blunt tool when combatting inflation or promoting growth.
Unexpected Inflation
Sep 2nd 2016, C.P. Chandrasekhar and Jayati Ghosh
The return of inflation, even if moderate, at a time when India is experiencing a normal monsoon and after a long period of inflation-targeted monetary policy is surprising.
The Business of Wilful Default
Aug 3rd 2016, C.P. Chandrasekhar
Adventurous lending followed by wilful default that has become more common in recent years, is linked to the change in banking practices and the pursuit of quick profits after liberalization.
The Return to Retail Lendinge
Aug 2nd 2016, C.P. Chandrasekhar and Jayati Ghosh
After having retreated from retail lending in the years since 2005-06, banks burdened by NPAs in areas like infrastructure seem to be returning to the retail market. How far can this go?
The Global "New Normal" is Not New- But it is still a real concern
Jun 21st 2016, C.P. Chandrasekhar and Jayati Ghosh
Global growth rates of the last five years are similar to those in the past, but now they are accompanied by unprecedented monetary expansion that seems to have little impact.
Bad Loans, Lending Behaviour and Growth
Jun 7th 2016, C.P. Chandrasekhar and Jayati Ghosh
As interested observers focus on the bad loans, accumulating in the books of Indiaís commercial banks, the implications it has for lending behaviour and growth are less explored.
No Clue to the Future
Apr 27th 2016, C.P. Chandrasekhar
The failure of the G20 countries to agree to an action plan not just to ensure recovery but prevent a second slump, may lead to countries adopting beggar-thy-neighbour policies.
The Phenomenon of Negative Interest Rates
Apr 21st 2016, Prabhat Patnaik
Even the unconventional measure of charging negative interest rates, as the author says, is unlikely to end the recession because capitalism today is in a deep structural crisis.
Interest Rate Conundrum
Mar 15th 2016, C.P. Chandrasekhar and Jayati Ghosh
With interest rates and bond yields turning negative in many developed countries, the efficacy of monetary policy as a countercyclical instrument is in question.
Interesting Turn Around
Oct 14th 2015, C.P. Chandrasekhar
The recent rate cut by the RBI reflects a shift in its policy stance and signals that it has accepted that the biggest threat in India today is not inflation, but deflation.
No Case for Complacence
Oct 5th 2015, C.P. Chandrasekhar
The yuan depreciation can trigger a chain of events that would convert the creeping world recession into another full-fledged crisis and India cannot be immune from contagion.
The Spectre of the Thirties
Jul 7th 2015, Prabhat Patnaik
The world economy today is reminiscent of the 1930s where competitive easing of monetary policy is not boosting aggregate demand and fiscal policy is barred by finance capital.
Government and RBI: No real stand-off over macro policy
May 8th 2015, C.P. Chandrasekhar
The current stand-off is more of a government effort to regain influence over macroeconomic management, as the government is accountable to the people whereas the RBI is not.
Asian Banks in Trouble
Jan 2nd 2015,, C.P. Chandrasekhar
Emerging market economies in Asia are confronted with signs of bank fragility owing to overexposure to the private sector, whose mounting external debt compounds the problem.
The RBI Governorís Unwarranted Remarks
Jan 2nd 2015,, Prabhat Patnaik
Dr. Rajanís criticism of the debt-waiver scheme for farmers underscores the fact that 'social banking" gets progressively eliminated in the era of neo-liberalism.
Bad News in the Good Days
Dec 16th 2014, C.P. Chandrasekhar
While the collapse in oil prices and moderation in food price inflation are good news for the Modi government, there is a real danger of it turning complacent as a result.
On High Interest Rates
Oct 13th 2014, C.P. Chandrasekhar
The RBI's decision to follow a restrictive monetary policy seems to have been influenced by the inflow of foreign finance, even if that is at the expense of growth.
The Herd Instinct at Work?
Sep 26th 2014, C.P. Chandrasekhar
The SENSEX is driven by herd instinct of FII inflow coming with assumptions which are at best speculative; the trend may get reversed in case of a rise in the interest rate.
Passing the Buck
Sep 19th 2014, C.P. Chandrasekhar
Instead of looking at developed countries' monetary easing, the RBI should explore policy alternatives to restrict capital inflow and reduce India's external vulnerability.
Money, Debt, and Deficit
Jul 30th 2014, Arnab K. Chowdhury
As debt is necessary to sustain the monetary system, hypothetical repayment of all debts can make the monetary system collapse and has the capacity to stall the real economy.
The Rupee's Climb
May 23rd 2014, C.P. Chandrasekhar
A surge of capital inflow appreciated the rupee while the RBI is not keen to intervene due to inflation implications. Rupee may stabilise or start depreciating again later.
Rajan's Target: Inflation or the poor?
Mar 18th 2014, Rohit
The RBI Governor's call for inflation targets to be set by the parliament is not a demand for providing relief to the poor, but a gesture to assure global finance capital.
Off-target on Monetary Policy
Feb 25th 2014, C.P. Chandrasekhar
The Urjit Patel recommendations for RBI to pursue the single objective of inflation targeting via interest rate control follows textbook Neo Keynesian model that belie recent experiences.
No Method in this Confusion
Feb 21st 2014, C.P. Chandrasekhar
The new RBI Governor struggles to maintain stability in the face of the threat of a US tapering even as other countries face turmoil in the absence of control on capital flows.
A New Growth Consensus?
Oct 28th 2013, C.P. Chandrasekhar
Recent measures by the RBI and the government emulate the path of fuelling growth by easy credit for specific sectors but that path is fraught with the risk of bank fragility.
Is there a Flight of Capital from India?
Oct 10th 2013, C.P. Chandrasekhar
Capital flight from India aggravated the overall position of rupee, but the country's balance of payments position is the fundamental weakness which needs to be addressed.
'Loans First' Ė Explaining Money Creation by Banks
Sep 30th 2013, Arnab Kumar Chowdhury
In fractional reserve banking, the description of banking as "accepting deposits for lending" distorts the perspective in which economics of banking is perceived and analyzed.
What Defines Headline Inflation?
Jul 30th 2013, C.P. Chandrasekhar
Barely a year and a half since the government started computing headline inflation based on CPI rather than WPI, it has returned to focusing on WPI-based inflation.
Redistributing Regulatory Power
May 21st 2013, C.P. Chandrasekhar
The FSLRC's far-reaching recommendations seek a fundamental redesign of India's historically evolved financial regulatory framework in favour of a liberalised financial sector.
In the Middle of a Muddle
Apr 21st 2012, C.P. Chandrasekhar
While the RBI is being advised to cautiously stimulate demand and growth, at the same time keeping a close watch on inflation, the Finance Ministry is being cajoled into stoking inflation by hiking a range of prices.
The Dollar Drain
Apr 16th 2012, C.P. Chandrasekhar
With the government announcing the new liberalised norm for remittances for Indian residents, there has been a spurt in capital outflow from the country. The rising Indian appetite to invest abroad could prove a problem if uncertainty with regard to rupee rises, as such uncertainty could trigger capital flight in a liberalised environment.
The Price of Growth 
Jan 27th 2012, C.P. Chandrasekhar
The early signs of a reduction in the rate of inflation have been used as evidence to make a case for lower interest rates. However, there is no reason to believe that within the current policy regime, rate cuts would not aggravate inflationary trends once again.
The Lurking Debt Problem
Dec 19th 2011, C.P. Chandrasekhar and Jayati Ghosh
Rising interest rates in the domestic market have been encouraging large firms in the Indian corporate sector to resort to foreign borrowing to finance domestic expenditures. In particular, there has been significant rise in the shares of commercial borrowings and short-term debt in total external debt. This tendency is increasing external vulnerability.
Evading an Inflation Cure
Sep 7th 2011, C.P. Chandrasekhar
The changing responses of the government to persisting inflation suggest that the government has given up on the task of curbing inflation and expects that people would learn to live with the phenomenon and adjust. Thus the focus on the long-run supply constraints in agriculture as being the reason for the recent inflationary surge is to evade rather than address the problem of inflation.
Trading Growth for Inflation
May 27th 2011, C.P. Chandrasekhar
If inflation is influenced by global developments, adjusting domestic interest rates may do little to redress the problem. The RBI's latest interest rate manoeuvre may thus end up being successful in contracting demand and growth, but it is likely to fail to rein in inflation.
Revisiting Capital Flows
May 4th 2011, C.P. Chandrasekhar and Jayati Ghosh
In a recent move the IMF surprised many by revising its position on the use of capital controls and making a case for them in special circumstances. It has followed this up with an analysis of capital flows to developing countries, which also explains its partial rethink on the use of capital controls by developing countries.
Policy Paralysis and Inflation
Feb 3rd 2011, C.P. Chandrasekhar
The price trends over the last one-and-a-half years suggest that inflation is being driven by factors which are structurally embedded in the economic environment generated by the government's neoliberal reform agenda adopted for two decades now. Further, neoliberal thinking is leading not only to policy paralysis and absurd reasoning, but also to policy responses that are contrary to what is needed.
(Un)Common Suffering: Distributional impact of recent inflation in India
Jan 6th 2011, Rajarshi Majumder and Subhadip Ghosh
Recent inflation in India is special both because of its peaks and its persistence. It is argued that unlike during 2008-09, recent inflation is due to structural problems. Further, a distributional analysis reveals that its impact is not shared equally. People in the lower income groups have been facing uncommon difficulties, as their purchasing power seems to have been halved over the last four years.
Disarray in the Global Economy
Oct 20th 2010, C.P. Chandrasekhar
The injection of cheap money at home to invest in emerging markets for profit by the US Federal Reserve, and its pressure on emerging market economies to allow their exchange rates to appreciate, in the hope that it would expand US exports and reduce its imports and facilitate a recovery, are a sure recipe for conflict.
Ignoring Asset Price Inflation
Sep 22nd 2010, C.P. Chandrasekhar and Jayati Ghosh
The spike in stock prices and the strengthening of the rupee are signals that it is time the government acted to regulate the capital flows that are generating these speculative trends. But while the government and the central bank are responding to inflation in the prices of goods, they are choosing to ignore the much sharper inflation in asset prices.
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