Expert Zone
Straight from the Specialists
India Markets Weekahead – It’s a no trade zone for now
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Indian markets were in a narrow Nifty band of 5550-5650 last week but volatility kept market participants on tenterhooks.
The winter session of parliament, as expected, opened with retail FDI being opposed by the Bharatiya Janata Party and other opposition parties. The logjam is expected to continue for some time as the Congress-led government seemed too strong-willed to be cowed by the threat to the passage of several financial bills.
Unless the government is able to convince its allies and some fringe parties, the FDI vote could shake investor confidence. The 2010 winter session of parliament was the worst in terms of productivity, followed by this year’s monsoon session. It remains to be seen whether the ongoing session also enters the hall of shame. An all-party meeting on Monday should provide further clues.
Yet another infructuous parliament session?
(The views expressed in this column are the author’s own and do not represent those of Thomson Reuters)
The last session of parliament was a washout. The present one looks to be no different going by its chaotic start.
The year ahead: expectations and apprehensions
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The economy is presently under stress and there are no indications that recovery is underway in spite of recent reforms announced by the government. India is not alone in under-performance. But it has fared too badly for its own reasons.
Is finance too competitive?
The opinions expressed are his own
Many economists are advocating for regulation that would make banking “boring” and uncompetitive once again. After a crisis, it is not uncommon to hear calls to limit competition. During the Great Depression, the head of the United States National Recovery Administration argued that employers were being forced to lay off workers as a result of “the murderous doctrine of savage and wolfish competition, [of] dog-eat-dog and devil take the hindmost.” He appealed for a more collusive business environment, with the profits made from consumers to be shared between employers and workers.
Concerns about the deleterious effects of competition have always existed, even among those who are not persuaded that government diktat can replace markets, or that intrinsic human goodness is a more powerful motivator than monetary reward and punishment. Where the debate has been most heated, however, concerns the effects of competition on incentives to innovate.
What money can buy
By Raghuram Rajan
The opinions expressed are his own
In an interesting recent book, What Money Can’t Buy: The Moral Limits of the Market, the Harvard philosopher Michael Sandel points to the range of things that money can buy in modern societies and gently tries to stoke our outrage at the market’s growing dominance. Is he right that we should be alarmed?
While Sandel worries about the corrupting nature of some monetized transactions (do kids really develop a love of reading if they are bribed to read books?), he is also concerned about unequal access to money, which makes trades using money inherently unequal. More generally, he fears that the expansion of anonymous monetary exchange erodes social cohesion, and argues for reducing money’s role in society.
Is inequality inhibiting growth?
By Raghuram Rajan
The opinions expressed are his own
To understand how to achieve a sustained recovery from the Great Recession, we need to understand its causes. And identifying causes means starting with the evidence.
Two facts stand out. First, overall demand for goods and services is much weaker, both in Europe and the United States, than it was in the go-go years before the recession. Second, most of the economic gains in the U.S. in recent years have gone to the rich, while the middle class has fallen behind in relative terms.
Should the RBI delay a rate cut?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
With the return of inflation, there are doubts whether the Reserve Bank of India (RBI) will go in for the next cut in repo rate any time soon. In April, inflation was up at 7.2 percent, 2 percent more than in March.
What the Euro means for Asia
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The Euro should not exist. In a perfect world (run by economists) the Euro would never have been created. Sadly, however, the world is not perfect — and it is run by politicians. The result is an entirely dysfunctional monetary union.
Market reform in China: Should we believe it?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The first step in solving a problem is admitting it. For years, the Chinese government and their defenders overseas insisted first that China was still reforming, then that state-led economic development was superior to market-led development. Evidence to the contrary came as news to many.
Global Economics: When China is not just China
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The People’s Republic of China’s (PRC’s) relationship with Iran receives a good deal of attention. As the U.S. considers how to stop Iran’s nuclear weapons program short of military action, the PRC is considered vital in ensuring economic sanctions are effective. But it has been difficult to win Chinese cooperation in applying sanctions. One mistake the U.S. may have made is treating China as a unified entity.
