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Vladimir Popov and Jomo Kwame Sundaram One mercantilist view is that exchange rate undervaluation – e.g., via accumulation of foreign exchange reserves in China’s case – is ‘industrial policy’ to promote export-led growth, benefiting producers of exports while discouraging imports. Taxes and subsidies are tools of selective industrial policy...

C. P. Chandrasekhar In the search for resources to make up for sluggish tax revenue growth, one source to which the Finance Minister rising to present Budget 20201 can legitimately turn is the Reserve Bank of India (RBI). But the government’s draft on RBI funds cannot...

Article Shared by  The below mentioned article provides a close view on the CES Production Function. Arrow, Chenery, Minhas and Solow in their new famous paper of 1961 developed the Constant Elasticity of Substitution (CES) function. This function consists of three variables Q, С and L, and...

C.P. Chandrasekhar Even while the effort to resolve the crisis resulting from non-performing assets in the banking sector was underway, India’s financial sector was overwhelmed by failures of large non-bank financial companies. In the discussion that followed the collapse of these NBFCs, the emphasis has been...

Prabhat Patnaik January 5, 2020 The idea is an old one, but the Hungarian economist Janos Kornai clearly conceptualized it, by drawing a distinction between a “demand-constrained system” and a “resource-constrained system”. A demand-constrained system is one where employment and output in the system are what they...

Article Shared by  (1). Direction and Inducement Planning: (i) Planning by Direction: Planning by direction is an integral part of a socialist society. It assumes complete absence of laissez faire. Therefore, it implies complete centralized planning with no features of a private economy. Under planning by direction, planning authority...

Article Shared by  The upcoming discussion will update you about the difference between Marginal Efficiency of Capital (MEC) and Marginal Efficiency of Investment (MEI). Keynes used the term ‘marginal efficiency of capital’ to refer to the unique rate of discount which would make the present value of...