Power tariff rose

After October 1, 2008 (when power tariff was raised by 16.0%, on average), the government yesterday raised the power tariff again effective from February 1, 2010. The tariff will be enhanced in two phases — the first from Feb 1 (by 11.0%) and the second from Aug 1 (by 6.66%) for bulk consumers. On the other hand, the tariff at the retail level will be increased by 5.0% effective from February 1. 

Economics' most influential people!

Though not that much thorough, yet there is one kind of ranking among economists of the world!

You may find this article from the Economist to see the result!

Two courses on General Equilibrium Modelling!

If you are interested, you can try the following two courses:

1. Globe Model Course using GTAP data and GAMS

2. 19th Annual Short Course in Global Trade Analysis 

Best of luck!

Bangladesh Bank Quarterly (BBQ)

Bangladesh Bank published its BBQ, April-June 2010 edition after a long break. Although it's a late publication compared to others; however, you may find some useful information it it, especially development on banking sector activities. (There is no direct internet link of BBQ. I am giving a direction: Please go to Bangladesh Bank website, click on 'Publication', then on 'Quarterly' and finally on 'Bangladesh Bank Quarterly'.)

Any confusion over transit issues?

If you have any confusion on understanding transit and interrelated issues, please read this article by Tanim Asjad on contemporary debates about imposing transit fees on Indian vessels, the appropriate policies for getting maximum benefits from transits.

Inflation continues to rise!

Inflation, point-to-point, reached to 8.3% in December 2010, accelerating on food prices. Food inflation reached to 11.0%, highest during the present government that took power in January 2009. The food-nonfood inflation gap continues to widen as nonfood inflation keeps declining, slowed down to 3.3% from 7.0% in December 2009.

Two interesting points are that: 

(i) during the last couple of months, rural food inflation is considerably higher than urban food inflation, clearly indicates less concentration of the authority in rural market situation; 

(ii) average inflation became higher than the point-to-point inflation, indicating a continued level of higher inflation over the months. 

Foreign aid declines!

Foreign aid declines by 45.0% during July-December 2010 over the same period of 2009. Here is the news! 

So it's a good or bad sign?

Good sign: (1) Dependency on foreign funds for development spending reduced, reduction in further level of policy prescription from outside.

Bad sign: (1) Increased pressure on budget financing, may guide the government to cut down a few foreign-aided projects; (2) government borrowing from banking sector will increase, so crowding out of private investment as well as inflationary pressures; (3) foreign exchange reserves declines, so pressure on exchange rate depreciation at the time when remittances growth is declining and import payments is increasing.

BB publishes Monetary Policy Statement

BB publishes the 11^th issue of its half yearly Monetary Policy Statement (MPS), outlines the monetary policy stance of BB for January-June 2011. MPS hints its stance will remain accommodative for productive sectors, while also discourage diversion and undue expansion of bank credit for wasteful unproductive uses to prevent buildup of inflationary pressures. Here is the link of MPS! 

Chronological news on recent stock market crash!

News! News! And News on recent stock market crash in Bangladesh! I am sure that readers (both from economics background and non-economics background) want to know the chronological developments on the issue. Based on news, articles and opinions published on various newspapers, a little attempt has been made here for readers so that they can relate one incident with others.

Stage 1: News and analysis on recent stock market crash

• Stocks nosedive 
• Historic plunge in stock prices 
• SEC halts trading at burses as stocks plummet at record speed 
• Dhaka stocks see record rebound 
• A delicate task, indeed 
• Dhaka stocks finish higher amid volatility  
• Stocks suffer biggest crash 
• Banks log hefty profit 
• Banks tread perilous path 
• Dhaka stocks slip for third session 
• Institutional investors’ role irks SEC 
• SEC suspends trading at burses again 
• SEC slaps circuit breaker to curb volatile trading 
• Unrest continues to buffet DSE as investors protest share fall 
• Market shut again as DGEN sheds 600 pts in five minutes 

Stage 2: Actions (bailout package?) of regulators against crash

•  BB relaxes loan adjustment period for banks 
• More BB fund to ICB to stabilize share market 
• Stock dealers allowed to buy shares up to Tk150m sans deposit from today 
• Harsh tax measures proposed for short–term stock investors 
• Govt to postpones book building for price fixing 
• DSE  seeks probe into book building ‘scam’ 
• Muhith admits Mistakes   
• Muhith announces stock market bailout measures 
• ‘Investor of last resort’ swings into action as stock plunges 
• High-powered body to probe share market 
• Restrictions on dividend disbursement by 15 banks 

Stage 3: Response of markets and experts on government actions

• Is circuit breaker the right solution? 
• Experts rap SEC for actions taken against six brokerage firms 
• Lax monetary policy may destabilize macro-economy 
• Ex-BB boss take a scathing look at share market debacles 
• Stock prices bounce back amid low turnover, thin transactions 
• The Stock market situation: what to do about it? 
• Paying attention to macroeconomic variables 
• From bull-run to crash, then on ‘recovery’ course 
• Avoid artificial move to boost stock market 
• Possibilities of insider trading in stock market in Bangladesh 

Monetary Policy Review

Bangladesh Bank published the recent edition of its Monetary Policy Review (MPR, Vol. IV, No. 2, October 2010) with new data and analysis on monetary developments of the Bangladesh economy. It's a worth reading at this time, especially when everyone talks a lot about role of the central bank's policies in determining stock prices.

World Economic Outlook Update, IMF

Twin problems – (i) quick recovering from global economic crisis and (ii) inflation pressures are emerging like one in 2008 - of the global economies are notable at this moment. Here is a brief on World Economic Outlook Update, IMF.

Why government borrows from IMF and the World Bank recently?

As the recent news comes, the government is close to two separate negotiations with the International Monetary Fund (IMF) and the World Bank to borrow US$2.0 billion (US$1.0 billion from IMF as the Balance of Payments support and US$1.0 billion from the World Bank as budgetary support).

Here is the news on why? 

Here: why stock prices fly?

I think, the following two articles rightly explained the basic reasons behind the recent unusual shocks in Bangladesh stock markets! Please read those and update your knowledge about any asymmetric information prevailing in regards to the recent stock market crash.

1. The Daily Star
2. The Financial Express 

Prof. Wahiduddin Mahmud on VOA

The gist of the interview of Professor Wahiduddin Mahmud by Voice of America (VOA) news offers a space to think over a few basic economic issues:

1. Whether the current export pace in Bangladesh is sustainable in the long-run due to the lack of appropriate efforts to improve the energy shortage;
2. Whether the government has been taking the appropriate measure to address the issues pertaining to long-run food security (such as asymmetric information about supply shortage vs. excess demand);
3. Trade-off between labor supply for export industries and overseas employment for higher remittances (a higher overseas employment can make a shortage in labor supply in export industries, which may increase the wage level for those industries and export may become expensive). 

Bangladesh stock crash in world news

There are some news and analyses recently on Bangladesh stock market crashes in the world media and responses.

1. World Street Journal
2. BBC
3. Weekly Blitz
4. New Zealand Herald
5. Al Jazeera
6. CNN
7. Yahoo news