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A theory is appropriate as long as it fits into the fact; when a theory doesn't fit in the fact, it's wise to walk with the fact.

Thursday, March 31, 2011

Debate on efficacy of micro-credit

In a purely academic debate, Martin Ravallion nicely summarizes the debate between 'Mark Pitt  and Shahidur Khandker (PK)' (who found the evidence to support the view that microcredit helps reduce poverty in their seminal paper in Journal of Political Economy in 1998) and 'David Roodman and Jonathan Morduch (RM)' (who found that Grameen Bank borrowing actually made women worse-off in a 2009 Working paper of the Center for Global Development). On March 26, Mark Pitt responds to RM's findings, confirms PK's original results and questions the appropriateness of the estimation method used by RM and inconsistencies while using the control variables by both RM and PK.

One can find the links of the main article in Ravallion's blog.

Please enjoy this very relevant and timely debate on the role of micro-credit!

Rajan says governments can’t afford another crisis

Raghuram Rajan, a professor at the University of Chicago talks with the Wall Street Journal on further capacity of governments in rich countries to bail out the economies if there is another crisis. He rather suggested to reconsider the role of government: what the government can and should do. 

Here is the link!  

Central banks can go broke!

An excellent article "Can Central Banks Go Broke?" by Willem Buiter from LSE to to read know more on various central bank's risks, possibilities of insolvency through balance sheet analysis of various developed countries' central bank. It also provides risk factor analysis if a central bank have significant foreign exchange-denominated liabilities. It's a worth reading!  

Wednesday, March 23, 2011

Amartya Sen on Growth and Well-Being

David Leonhardt, a columnist from the New York Times, wrote a gist about how Porfessor Amartya Sen see the relationship between growth and well-being in his blog in Economix  

Good to know! 

BD economy under stress: IMF

Due to high inflation, lower remittance (which prompted negative current account balance and thus create pressure on foreign exchange market) and higher fiscal burden comes from higher subsidy for safety-net programs and petroleum price at the international market, International Monetary Fund (IMF) says Bangladesh economy is under serious macroeconomic and financial stress. It provides a few suggestions too. You may find it here! 

Sunday, March 20, 2011

IMF on BB's role

It's the lack of responsibility played by the Bangladesh Bank (BB) is the broad reason for the recent stock market debacle as found by the International Monetary Fund (IMF). Here is the news link from the Daily Jugantor.

Tuesday, March 15, 2011

AER Top 20 Articles

On the occasion of 100 Years of the American Economic Review, the Top 20 Committee, consisting of Kenneth Arrow and Robert Solow, among others, selected the "Top 20" articles (downloadable) published in the American Economic Review during its first hundred years.

Here is the link! 

Saturday, March 12, 2011

BB raised policy rates by 50 basis points

Bangladesh Bank, the central bank of Bangladesh, raised its policy interest rates, repo and reverse repo, by 50.0 basis points to 6.0% and 4.0%, respectively, after nearly eight months to curb inflationary pressures. It keeps playing its role to check unwanted money demand from commercial banks through money tightening measures, though question remains about the effectiveness of such policies in controlling inflation. It seems the main goal is to check rapid credit flows to unproductive sectors of the economy. No doubt, it is one of the main goals of the central bank.

Here is the news link.  

Thursday, March 10, 2011

Hilary Clinton on Economic Growth

The Lady provided so many important statistics in real, focused on more important issues that we need to focus more and more in this wonderful article.

Here is the article:

I Know the Secret to Economic Growth: Hillary Rodham Clinton

Solow on 2008 financial crisis

Two lessons Solow would like to see economists take to heart are that,

i) in the modern world, it is impossible to pursue macroeconomics without taking account of finance; and

ii) second, financial markets are not necessarily stable or self-correcting.

Tuesday, March 8, 2011

Rethinking macroeconomic policy!

IMF addresses big economic questions through reexamining the mainstream macroeconomists’ framework – which largely ignored finance — in the light of the most economically devastating global financial crisis in more than half a century.
Here are the two links on updates:
1. Real Time Economics
2. IMFDirect

Monday, March 7, 2011

Oil Price Shocks and Global Recovery

In an interview, Nobel Prize-winning economist Michael Spence explains the relationship between oil price shock and global economic recovery, especially in the context of USA. You will like to read this. 

Here is the link. 

Sunday, March 6, 2011

Food inflation reaches 30-month high!

Inflation continues to rise in Bangladesh, led by food inflation which reached a 30-month high in January 2011.

In January 2011, overall Inflation was 9.0%;
Food inflation was 11.9%; Non-food inflation was 3.9%
Rural inflation was 9.6%, whereas Urban inflation was 7.7%.

Here is the news.

Robert Solow: Residual Brilliance

If you wanna to know more on Robert Solow, especially recent updates, the article 'Residual Brilliance' is a must read one from the Peoples in Economics, Finance and Development, IMF.