Below is given the Table of Contents of the
Issues listed above:
Volume 57.
No 3. July-September, 2009
ARTICLES / 1
A Survey on Dynamics of
Current Account Imbalances Seema Narayan
The extant literature has studied
current account dynamics under two
related topics, namely movements in
the current account imbalances and
sustainability of current account
imbalances. In this paper, these two
strands of the current account
literature are reviewed with the aim
of providing a survey of theoretical
views and empirical evidence on
movements and sustainability of the
current account. This paper
highlights the diversity and
disparity in the predictions of the
current account theory and the vital
role of empirical studies in
enhancing our understanding of a
country's current account movements.
An examination of the current
account sustainability literature
suggests that the task of
quantifying whether or not the
current account is sustainable is
not a clear-cut exercise.
Seema Narayan, School of Economics,
Finance and Marketing, RMIT
University, Melbourne, Australia.
E-mail:
seema.narayan@rmit.edu.au
ARTICLES
/ 2
Economic Governance Nobel Prize Committee*
Institutions are sets of rules that
govern human interaction. The main
purpose of many nstitutions is to
facilitate production and exchange.
Examples of institutions that affect
human prosperity by enabling
production and exchange include
laws, business organisations and
political government. Economic
governance research seeks to
understand the nature of such
institutions in light of the
underlying economic problems they
handle.
One important class of institutions
is the legal rules and enforcement
mechanisms that protect property
rights and enable the trade of
property, that is, the rules of the
market. Another class of
institutions supports production and
exchange outside markets. For
example, many transactions take
place inside business firms.
Likewise, governments frequently
play a major role in funding pure
public goods, such as national
defence and maintenance of public
spaces. Key questions are therefore:
which mode of governance is best
suited for what type of transaction,
and to what extent can the modes of
governance that we observe be
explained by their relative
efficiency?
The Nobel Prize for the year 2009 is
awarded to two scholars who have
made major contributions to our
understanding of economic
governance, Elinor Ostrom and Oliver
Williamson. This paper is a brief
overview of the seminal
contributions by these two scholars
to the field of economic governance.
This paper has been included in this
Issue with a view to encouraging
good informed debate on the subject.
* Compiled by the Economic
Sciences Prize Committee of the
Royal Swedish Academy of Sciences.
ARTICLES / 3
The Framework of Household Model
under
Joint Forest Management Programme
A Study on Forest Dependent
Households
Nimai Das and Debnarayan Sarker
This study suggests that JFM
households receive higher economic
benefit after JFM: the physical
increase of forest related works has
a positive impact on the prices of
the same influencing higher hours
(time) of work which help them
increase higher annual per capita
net real income. The poorer the
households are according to their
economic status, greater is the
dependence on forest and so greater
is the extent of involvement in low
return forest activities (LRFAs) and
forest wage work. It might indicate
that JFM plays a positive role for
economic security of the forest
fringe households.
Debnarayan Sarker, Professor in
Economics, Centre for Economic
Studies, Presidency College, Kolkata.
Email:
sarkar_d_n@rediffmail.com
ARTICLES
/ 4
Determinants of Indian WPI Inflation Sujata Kar and Surajit Sinha
This paper reports estimates from
some heuristic models that allowed
the data to select important
determinants of Indian WPI inflation
during 1971-2004. Current growth in
money supply, income, agricultural
output and imports were the most
important determinants of inflation.
However, money supply alone was the
most important contributing variable
during 1981-2004. GDP growth and
sectoral output growths had
countered the inflation rate quite
substantially. Export growth had a
switching role across the two sample
periods.
Sujata Kar, Lecturer, COER School of
Management College of Engineering,
Roorkee.
Email:
sujata.kar@gmail.com
Surajit Sinha, Professor, HSS
Department, IIT Kanpur. Email:
surajit@iitk.ac.in
ARTICLES
/ 5
Did Liberalisation Change the Indian
Business Cycle? Biru Paksha Paul*
The existing literature describing
the impact of economic openness on
the business cycle is ambiguous. I
find that the Indian business cycle
of the liberalised regime is
significantly less volatile than
that of the controlled regime under
the licence raj. I also find that
the average cumulative output gap in
business cycles has decreased after
liberalisation, and expansions have
become longer than before. However,
these differences are not
significant once the corresponding
standard deviations are taken into
account for the conventional tests.
Thus, the apparent business cycle
asymmetry is not significant in
India. While the models with
autoregressive conditional
heteroskedasticity (ARCH) can better
estimate the Indian business cycle
in both regimes, variance
coefficients in the ARCH model are
significantly lower in the
liberalised era. Furthermore, the
outof- sample fit of the ARCH model
has improved after economic
openness. Reduced output volatility
in the wake of liberalisation has
important policy implications not
only for India, but also for other
economies confronting the issues of
globalisation.
Biru Paksha Paul, Assistant
Professor, Department of Economics,
State University of New York, USA.
Email:
biru.paul@cortland.edu
ARTICLES
/ 6
A Comparative Study of Banking in
China and India
Non-Performing Loans and the Level
Playing Field
Daya Shanker, IKM Mokhtarul Wadud
and Harminder Singh
This paper compares the operative
performances of the banking
institutions in China and India,
taking into account the contentious
issue of institutional differences
in the banking sectors of these two
economies, as reflected in the
generation of non-performing loans.
The study also examines the issue of
using of non-performing loans to
provide countervailable subsidies to
exporting organisations. Our results
show that the efficiency differences
between banks in these two countries
can be related directly to their
institutional differences.
Daya Shanker, School of Management
and Marketing, Deakin University,
Australia.
Email:
daya.shanker@deakin.edu.au
IKM Mokhtarul Wadud, School of
Accounting, Economics and Finance,
Deakin University, Australia.
E mail:
wadud@deakin.edu.au
Harminder Singh, School of
Accounting, Economics and Finance,
Deakin University, Australia.
Email:
singh@deakin.edu.au
COMMUNICATION FOR DEBATE & RESEARCH
/ 1
Trade Measures in Climate Change
Policies
Compatibility with WTO and UNFCCC U. Sankar
This note deals with the
compatibility of trade measures used
in cap-and-trade and carbon tax
systems in developed countries with
the provisions of the WTO and UNFCCC.
After a critical examination of the
American Clean Energy and Security
Act, 2009 of the United States, it
finds that unilateral measures such
as targeting only China and India
and levy of import duties or
requirement of allowances for
imports of carbon-intensive products
into the US from only certain
countries, would violate WTO
Articles dealing with Most Favoured
Nation, National Treatment and
Environmental Exceptions. Some trade
measures in the cap-and-trade and
carbon tax systems violate the
principles of equity and common but
differentiated responsibilities
according to the respective
capabilities of states contained in
the UNFCCC. It concludes with a
negotiation strategy for India in
the forthcoming COP 15 meeting at
Copenhagen.
Brain Drain and Brain Gain
The European Approach Hans Werner Mundt
International migration has been a
subject matter which has been
extensively discussed in the
literature. The debate had started
with the negative impacts
highlighted in terms of brain drain.
In recent years, however, both
positive and negative effects of
migration are being discussed both
from the point of view of the origin
countries supplying labour and
labour-importing host countries.
This paper provides an assessment of
brain drain as also brain gain from
the point of view of the European
economies.
Hans Werner Mundt, Senior Advisor,
Migration and Development, Deutsche
Gesellschaft für, Technische
Zusammenarbeit (GTZ). Email:
hans-werner.mundt@gtz.de
COMMUNICATION FOR DEBATE & RESEARCH
/ 3
Water and Development
Some Research Issues V.R. Panchamukhi
This brief research note is based on
the lecture delivered by the author,
as the prestigious Bob Hawke Lecture
at Bob Hawke Prime Ministerial
Center, Adelaide. The title of this
lecture was "Sustainable Water and
Sustainable Societies: Need for a
Speedier and Integrated Response to
the Challenges". In this note, it is
argued that water would soon become
a strategic resource with the
situation of acute crisis of
demand-supply gap, looming large.
This note also gives some references
of useful websites and sources of
information. It is hoped that
researchers would be inspired to
take up the theme of "Water
Resources and Development", for
hitherto more ntensive
research at the national, regional
and sub-regional levels.
V.R. Panchamukhi, Former Chairman,
Indian Council of Social Science
Research, New Delhi
Email;
vadrajp36@yahoo.com
COMMUNICATION FOR DEBATE & RESEARCH
/ 4
Hyman Philip Minsky
A Note on his Financial Theory and "Minsky
Moment"*
Editor
This write up on the finance theory
of Hyman Philip Minsky and the
socalled 'Minsky moment', is drawn
from the wikipedia and
eproduced here for generating
informed debate on the current
global financial and economic
crisis. “Dr. Minsky proposed
theories linking financial market
fragility, in the normal life cycle
of an economy, with speculative
investment bubbles endogenous to
financial markets. Minsky claimed
that in prosperous times, when
corporate cash flow rises beyond
what is needed to pay off debt, a
speculative euphoria develops and
soon thereafter debts exceed what
borrowers can pay off from their
incoming revenues, which in turn
produces a financial crisis. As a
result of such speculative borrowing
bubbles, banks and lenders tighten
credit availability, even to
companies that can afford loans, and
the economy subsequently contracts.”
This quote sums up the essential
message of Minsky's Theory. It is
our hope that many researchers would
be inspired to do further research
on the current global crisis and
provide useful insights into the
framework of the policy initiatives
required to minimise the adverse
effects of the crisis.
* Drawn from
www.wikipedia.com on
Minsky; Wikipedia is not responsible
for the views expressed in this
write up.
BOOK SCAN
>>REVIEW / 1
Indian Banking and Globalization
(Author: Rajesh Pal, pp. 3051+xx.
New Delhi: Adhyayan Publishers &
Distributors, 2009)
