Ace forecaster, the RBI Governor, Raghuram Rajan has warned that too much use of monetary easing will push the world economy into Great Depression of the 1930s variety. He called for international consensus on policy making to escape from the present crisis. The global economy is "slowly slipping" into Great Depression-like problems of 1930s. He asked central banks to define "rules of the game" to find a solution. The RBI governor was speaking at seminar at London Business School on Thursday. Indirectly, he criticized the one sided policy stances of advanced central banks without considering its impact on the world economy. Already, the competitive monetary easing by the advan
Europe’s ailing but defiant economy Greece and Eruozone are in the course of a devastating conflict over the referendum announced by the Greek PM Alexis Tsipras. The Greek PM has announced a rather surprising referendum for July 5th about the austerity plan suggested by its mainly European creditors. The time cosnusming referendum shows that Greece is not politically willing to offer any commitment like austerity. Reacting to the Greek referendum move, Eurozone leaders have said that Athens has violated the negotiation process unilaterally. For the first time, the Eurozone leaders also made hints that they are thinking a European Monetary Union without Greece. Solidari
Within no time, two global institutions will start functioning in China’s Shanghai and Beijing. First is the BRICS managed New Development Bank (NDB). Second is the keenly watched development magnet that is attracting even advanced countries– the Asian Infrastructure Investment Bank (AIIB). The NDB’s (or the previously announced BRICS Bank) President nominee, KV Kamath has told that the bank will start functioning from second half of 2015. If it happens, Shanghai will host the first international organization that China hosts. But there is strong perception that China is more interested in the AIIB than the NDB. This is because of the probability of high Chine
Greece and its creditors of Euro Zone have failed to reach on any agreement in the most important talk to prevent a Greek default. The EU has called an emergency meeting of the EU state heads on the issue on Monday just eight days remaining for the Greek repayment of 1.6 billion Euros to IMF. The European Council President Donald Tusk revealed that the heads of state meeting has to find a political solution to the crisis. The President told that it is now time to “urgently discuss” the Greek crisis “at the highest political level”. Greece was demanding for a political solution while ruling out austerity measures. The Financial Times of London quoted m
Panic withdrawals of bank deposits associated with economic crisis are engulfing Greek economy like a financial tsunami. Early hours after the failure of the Luxembourg meeting indicate that people are withdrawing deposits from banks quickly. According to the Greek central bank, depositors pulled out more than 1 billion Euros on Thursday from the country’s four large banks. This means that the total withdrawal for the week is 3 billion Euros which is three times the average weekly withdrawal over the past two months. Greece’s debt commitment to IMF for this month is 1.6 billion Euros. Since the nature of the crisis has percolated into the banking system, the
Important events on the Greek crisis are coming quickly. An anti austerity rally is taking place in Athens just before the decisive Euro zone Finance Ministers meeting at Luxembourg on June 18th. At Luxembourg, Greece and its bailout financers of the Euro zone are about to start an important and final phase of discussion for extending financial help to Athens. This phase may extend for the next one month, within which both parties should come to a consensus. In the absence of such a consensus Greece have to make default and exit from the Euro zone. Such an outcome will add uncertainty for Euro zone as well as for the global economy. Greece has to make an immediate payment of
The war of words between, Europe’s potential defaulter –Greece and its creditors goes unending. After heated exchanges of words, both parties are meeting in Luxembourg on Thursday to find a way out of the problem. Greece immediately needs 7.2 billion Euros to repay its debt to the IMF. Already, the IMF has pulled out from the present talk after Athens declined to undertake some serious expenditure cutting suggested by the Fund. If the remaining creditors in the field, - the European Council and the ECB, are not extending new loans, Greece will default. Then, a Greek exit from the Eurozone becomes unavoidable. Here, Greece will become the first country to exit fro
During the first ten days of this month, China has made some ultra speed moves on Myanmar. Two important moves happened during the first two weeks of June. First was the visit made by the former human right activist and pro democracy leader, Aung Sann Suu Kyi’s to China. Second was the PLA’s military exercise - land and air mode, near Myanmar border. Myanmar is very important for China, in its dreamt reach to the Indian Ocean. An easy look into the map will show that there are only two land route options for China to put its leg into the Indian Ocean- Pakistan and Myanmar. The other option – the risky route through Pakistan has less attraction because of sec
Europe’s ailing economy- Greece has further closed in on an inevitable default. Greece on late Friday has rejected a plan proposed by its creditors – the IMF and the European Council on conditions for the restructuring of loans. Greece needs immediate money to repay its past debt to the creditors as well as emergency funds to run basic services. The tussle between the Greek political leadership and the creditors were continuing over the last couple of weeks, with the creditors expecting Greece will come out with a plan that include stricter austerity at home. On Thursday, the IMF that has provided one of the most concessional loans to Athens last year has walked
The Global Economic Prospects 2015 by the World Bank forecasts that with the exception of India, all other major economies have fallen into a major slow down. It predicts that the exuberance of the developing world has almost finished in reviving the global economy. The World Bank has reduced the target growth rate of the world economy at 2.8 per cent for 2015. Adverse conditions indicate that the world economy is slipping into a slowdown quicker than expected. Developing word is facing a structural slow down which may last for many years to come. Hence the developed economies like the US have to support the global economic revival. In an analytical part, the Rep
Dictionary on Indian Economy
- Logic of withdrawing Rs 1000 and Rs 500 notes
- Raghuram Rajan: The Gladiator returns to Chicago
- Why the GST reform is transformational?
- Good intention but poor thinking - what troubles demonetization?
- India Black Money Report: CBI underestimates black money at Rs 25 lakh crore
- High interest rate rather than inflation is the macroeconomic problem for India right now
- Japan’s first trade deficit in 30 years is part of the Global Shift
- Why we need an emergency monetization plan as well?
- Arvind Subramanian rocks with 'Chakravyuha' in Economic Survey
- NREGS: give respect to the tax payer’s money