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Amol Agrawal

Amol Agrawal

I am currently pursuing my PhD in economics. I have work-ex of nearly 10 years with most of those years spent figuring economic research in Mumbai’s financial sector.

Articles by Amol Agrawal

The Economic History Podcast

4 days ago

Seán Kenny, Postdoctoral fellow at und University Sweden has started a superb podcast on economic history.

The Economic History podcast is a platform for sharing knowledge, ideas and new research with a general interest audience. Each fortnight, we meet leading academics in the field and discuss a range of topics, including pandemics, long run economic growth, gender issues, financial crises, inequality, sustainable development and a number of weird and fun economic experiments in history. There is no time like the past to help us understand the present.
The podcast has featured 24 episodes so far and each one is a gem. It is amazing to grasp and understand economic history via this medium. The subject has many layers which papers, books etc. cannot cover and can be done much

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Central Bankers and animal analogies: From hawks/doves to green swans

4 days ago

Danae Kyriakopoulou in this OMFIF piece:
Central bankers have long been associated with birds, traditionally divided between inflation-worried hawks or employment-leaning doves. More recently a third species, the ‘green swan’, has entered the conversation. Here, central bankers are increasingly united.
‘Green swan’ was coined by authors at the Bank for International Settlements in January 2020 to characterise the new type of systemic risks from climate change. The term is inspired by Nassim Nicholas Taleb’s concept of ‘black swan’ during the 2008 financial crisis to connote rare, catastrophic and unpredictable events. However, the main difference between the concepts is that a green swan will not be a rare event in the face of inaction, it will be a certainty.
In the central banks and

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How the Civil War Shapes the Future of Stablecoins

5 days ago

Franklin Noll in this coindesk piece:

In 1861, civil war broke out in the United States. Over the next four years of conflict, the politics of the U.S. were remade and so were its monetary affairs. A new monetary system was born during the war years that exists with us today and is shaping our stablecoin future.

This entry was posted on June 9, 2021 at 9:31 pm and is filed under Academic research & research papers, Central Banks / Monetary Policy, Economics – macro, micro etc. You can follow any responses to this entry through the RSS 2.0 feed.
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Financial repression is making a comeback

5 days ago

My new piece in Moneycontrol:
It is interesting how financial repression has made a comeback against all odds. While the financial repression policies are being conducted differently compared to their earlier avatars, the broad idea is the same 

This entry was posted on June 9, 2021 at 1:54 pm and is filed under Academic research & research papers, Economics – macro, micro etc, Financial Markets/ Finance, Indian Economy/Financial Markets. You can follow any responses to this entry through the RSS 2.0 feed.
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Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market: Case of Franklin Templeton India

5 days ago

The sudden melting of FT India debt Mutual Funds was more than just a meltdown.
SEBI recently released a order implicating one of its directors for selling off his and family’s investments in the said mutual fund schemes:
The issue that arises for consideration in the present matter is whether the redemption of units in some schemes of a mutual fund by a director of the Asset Management Company of the Mutual Fund, and his immediate family, at a time when the said schemes were facing significant redemption pressure (the schemes were later wound up) and the director was allegedly in possession of material non – public information relating to the same, would fall within the scope of ‘fraudulent’ or ‘unfair trade practice’ as defined under the SEBI(Prohibition of Fraudulent and Unfair

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El Salvador is one step closer to making bitcoin legal tender..

5 days ago

EL Salvador’s President Nayib Bukele has sent a law to Congress proposing to make bitcoin legal tender. Currently, the country has adopted US Dollar as its currency. So if the law goes through, the country will have both currencies:

El Salvador’s President Nayib Bukele has sent a law to the country’s congress proposing to make bitcoin legal tender.
If approved by the legislative body, El Salvador would become the first nation in the world to give the cryptocurrency this status.
Bukele posted a screenshot of the “Bitcoin Law” in a tweet on Wednesday.
“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law reads.
If

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Money, technology and banking: what lessons can China teach the rest of the world?

6 days ago

Michael Chui in this BIS paper:
Technology companies entering the financial services industry have become a global phenomenon over the past decade. This trend is most remarkable in China where two large technology firms (BigTechs) have emerged as important market players, especially in payment services. This paper examines the factors driving this development and whether the Chinese experience could be applied elsewhere.
Several lessons emerge: first, like any company in a network industry, it is important to build and maintain a large user base and that is the key factor behind BigTechs’ expansion into the financial industry. On this basis, these BigTechs can be seen as “accidental financiers” rather than “aggressive invaders”.
Second, these firms are cautious in offering

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Draghi pivotal as Lagarde/ECB maintains easy monetary policy

6 days ago

Draghi is again central to Euroarea fortunes though in a different role as PM of Italy.
Antonio Armellini, David Marsh and Pierre Ortlieb in this piece:
Mario Draghi, Italian prime minister, is emerging as Europe’s pivotal politician days ahead of a crucial European Central Bank meeting likely to extend the monetary legacy he laid down as its president in 2011-19.
European statistics compiled by OMFIF show evidence of sharply rising producer prices across the euro area, by as much as 8% year-on-year (Figure 1). Although there are only limited signs of this feeding into permanently higher costs for consumers, much increased energy and other input prices, exacerbated by bottlenecks (Figures 2-4), complicate the ECB’s monetary policy-setting at the 10 June meeting of its governing

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Profile of Rohini Pande

7 days ago

Profile of economist Rohini Pande:
Pande, 49 years old, is “one of the most influential development economists of her generation,” according to the American Economic Association, and has made groundbreaking contributions to political economy, international development, gender economics, anti-corruption, and efforts to combat climate change.
“Running through her work is an insistence not simply to ask what will work to improve the lives of the poor, but why it works, and what this teaches us about how institutions should be structured and how we should view the world,” says Charity Troyer Moore, Yale’s director for South Asia economics research.
In 2019, Pande was named the Henry J. Heinz II Professor of Economics at Yale University and director of the Economic Growth Center. She spent

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Bureaucratic Indecision and Risk Aversion in India

7 days ago

Interesting paper by IDFC Institute researchers: Sneha P., Neha Sinha, Ashwin Varghese, Avanti Durani and Ayush Patel.
The Indian bureaucracy suffers from indecision and risk aversion, resulting in an inordinate focus on routine tasks, coordination failure, process overload, poor perception, motivational issues and a deterioration in the quality of service delivery. We argue that bureaucratic indecision, in a large part, is a form of rational self-preservation exercised by bureaucrats from the various legal and extra-legal risks to their person, careers and reputation. These risks originate from problems of organizational design, institutional norms and other political factors.
The research for this working paper included a review of interdisciplinary literature on bureaucracy and

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20 years of BRIC acronym: Is the emerging world still emerging?

7 days ago

It has been 20 years since Jim O’Neil coined the term BRIC – Brazil, Russia, India and China. In this IMF piece, He reflects on the acronym BRIC and way forward for emerging markets:
My primary goal in my first paper, “The World Needs Better Economic BRICs,” was to make a case for changing the framework for global economic governance, not necessarily the inevitable future growth of these countries.
In subsequent papers I laid out what the world could look like, in the highly unlikely event that the countries we studied reached their potential. We defined this potential using the standard methodology for macroeconomics, in which real economic growth is determined by two variables: the size of a nation’s workforce and the economy’s productivity. Because of their population size, the

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The Covid pandemic in the market: infected, immune and cured bonds

7 days ago

Andrea Zaghini in this ECB working paper looks at how the pandemic impacted different bond markets in Europe:
By focusing on the cost conditions at issuance, I find that not only the Covid-19 pandemic effects were different across bonds and firms at different stages, but also that the market composition was significantly affected, collapsing on investment-grade bonds, a segment in which the share of bonds eligible to the ECB corporate programmes strikingly increased from 15% to 40%. Contemporaneously, the high-yield segment shrunk to almost disappear at 4%. Another source of risk detected in the pricing mechanism is the weak resilience to pandemic: the premium requested is around 30 bp and started to be priced only after the early containment actions taken by the national authorities.

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Choosing Bank of England’s Chief Economist: Manager or Thought Leader?

7 days ago

Andy Haldane, Chief Economist of Bank of England resigned recently.
Andrew Sentance, former MPC member in this blogpost looks at the qualities the new chief economist should have:
The Bank of England is searching for a new Chief Economist, and the formal deadline for applications was Wednesday 2 June. But what is the Bank’s Chief Economist expected to do? And what skills and qualifications does he or she need? After all, the Bank has lots of economists. What special responsibilities does our central bank need a Chief Economist to carry out?
In the initial phase, BoE appointed academicians as Chief econs. This changed recently with appointment of people like Haldane:

The role of Chief Economist at the Bank formally came into being when Mervyn King was appointed in 1991. However, it

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On the Green Interest Rate

8 days ago

Prof Nicholas Muller in this NBER research paper explains green interest rate:

This paper demonstrates how a central bank might operationalize an expanded role inclusive of managing risks from environmental pollution. The analysis introduces the green interest rate (rg) which depends on temporal changes in the pollution intensity of output. This policy instrument reallocates consumption from periods when output is pollution intensive to when output is cleaner. In economies on a cleaning-up path, rg exceeds r*. For those growing more polluted, rg is less than r*. In the U.S. economy from 1957 to 2016, rg exceeded r* by 50 basis points. Federal environmental policy reversed the orientation between rg and r*.
Useful way to think about how to bring central banks in the green economy

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Predicting Fiscal Crises: A Machine Learning Approach

10 days ago

Klaus-Peter Hellwig of IMF in this working paper:
In this paper I assess the ability of econometric and machine learning techniques to predict fiscal crises out of sample. I show that the econometric approaches used in many policy applications cannot outperform a simple heuristic rule of thumb. Machine learning techniques (elastic net, random forest, gradient boosted trees) deliver significant improvements in accuracy.
Performance of machine learning techniques improves further, particularly for developing countries, when I expand the set of potential predictors and make use of algorithmic selection techniques instead of relying on a small set of variables deemed important by the literature.
There is considerable agreement across learning algorithms in the set of selected

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Central banking independence in times of shifting societal concerns

11 days ago

ECB’s Isabel Schabel in this speech discusses how high inflation in 1970s led to independent central banks. The challenges facing central banks today are different. How central banks respond to these challenges will be crucial to their existence and retaining independence:
The challenges central banks are facing today are fundamentally different from the ones that were relevant when they gained broad political independence. Inflation is less of a concern to many people, in large part reflecting the achievements of central banks over time.
As a result, expectations towards central banks have changed. Many call for central banks to have a more active role in tackling wider societal challenges, climate change in particular. Such shifts in preferences coincide with a broad distrust of

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Podcast with Akhil Handa: How Bank of Baroda is chartering its digital strategy..

12 days ago

Anupam Gupta’s Paisa Vaisa podcast features Akhil Handa, Digital Head at Bank of Baroda.
Akhil discusses how the 112 year old bank is going big on digital forays. BoB’s website has many more details. How some of the Public Sector Banks are reinventing themselves is quite a story. BoB has always had application of technology in its DNA and not surprising they are doing some interesting things in the space.

This entry was posted on June 3, 2021 at 10:04 am and is filed under Academic research & research papers, Indian Economy/Financial Markets. You can follow any responses to this entry through the RSS 2.0 feed.
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Podcast with Ila Patnaik: Evolution of RBI’s monetary policy

12 days ago

Amit Varma hosts Dr Ila Patnaik in his brilliant Seen and Unseen Podcast.
The podcast has interesting discussion on how RBI’s monetary policy has evolved over the years.

This entry was posted on June 2, 2021 at 12:55 pm and is filed under Academic research & research papers. You can follow any responses to this entry through the RSS 2.0 feed.
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Point targets, tolerance bands, or target ranges? Inflation target types and the anchoring of inflation expectations

13 days ago

Michael Ehrmann in this ECB working paper:
Inflation targeting is implemented in different ways – most often by adopting point targets, by having tolerance bands around a point target, or by specifying target ranges. Using data for 20 economies, this paper tests whether the various target types affect the anchoring of inflation expectations at shorter horizons differently.
It tests two contradictory hypotheses, namely that targets with intervals lead to (i) less anchoring, e.g. because they provide more flexibility to the central bank, or (ii) better anchoring, because they are missed less often, leading to an enhanced credibility.
The evidence refutes the first hypothesis, and generally finds that target ranges or (in some cases) tolerance bands outperform the other types. However,

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Understanding how central banks use their balance sheets: A critical categorisation

13 days ago

Stephen Cecchetti and Paul Tucker in this voxeu piece say that central banks use their balance sheets for multiple purpose. There is a need to list and specify these seperate purposes:
Since the Global Crisis, the size of central bank balance sheets has grown significantly. Traditional goals of price and financial stability are insufficient for assessing the success of modern central banking operations. This column introduces a new framework for categorising and understanding central bank balance sheet operations. Monetary policy decisions are separated from facilities for lender of last resort, market maker of last resort, providing selective credit, and ensuring emergency government financing. To maintain legitimacy and accountability, central banks should formally distinguish these

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Why banks differ in the pace of adoption of new technology?

13 days ago

Prachi Mishra, Nagpurnanand Prabhala and Raghuram Rajan have a new paper on the topic. They explain the findings on voxeu:

India only introduced credit scoring technology in 2007. This column studies its adoption by the two main types of banks in the country: new private banks and state-owned public sector banks. While both types of banks check nearly all scores for new borrowers, public sector banks are very slow to adopt scoring for their prior relationship borrowers even though scores are reliable predictors of delinquency. Government ownership does not explain this slow adoption, as older private banks also exhibit similar adoption patterns. The findings suggest that practices from the past, when adapted to different regulatory and economic environments, are slow to change and

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RBI comes to the rescue of Centre and States

14 days ago

My new piece in Moneycontrol.
Amidst all the economic chaos and uncertainty, RBI once again comes to rescue both the Centre and State governments.

This entry was posted on May 31, 2021 at 3:11 pm and is filed under Academic research & research papers, Indian Economy/Financial Markets. You can follow any responses to this entry through the RSS 2.0 feed.
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The impact of bankruptcy on innovative firms

14 days ago

Song Ma, Joy Tianjiao Tong & Wei Wang in this NBER paper:
This paper studies how innovative firms manage their innovation portfolios after filing for Chapter 11 reorganization using three decades of data. We find that they sell off core (i.e., technologically critical and valuable), rather than peripheral, patents in bankruptcy. The selling pattern is driven almost entirely by firms with greater use of secured debt, and the mechanism is secured creditors exercising their control rights on collateralized patents. Creditor-driven patent sales in bankruptcy have implications for technology diffusion—the sold patents diffuse more slowly under new ownership and are more likely to be purchased by patent trolls.

This entry was

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An online tour of Bank of Japan

17 days ago

Bank of Japan has videos giving a tour of the central bank building and its underground vault:
Welcome to “BOJ from Home.” Here, you can explore the tour route of the Bank of Japan’s Head Office (designated as an Important Cultural Property) through various online contents, including a video showing the must-sees on the tours and a 3-D/virtual reality (VR) tour of the Main Building.
In the VR tour and “360-Degree Walk-Through” of the Bank’s Main Building, the interior of the building can be viewed in 3-D on any PC or mobile device.
You can also enjoy an immersive virtual reality experience using VR goggles or glasses

This entry was posted on May 28, 2021 at 7:07 pm and is filed under Central Banks / Monetary Policy. You can

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Tyler Cowen interviews Mark Carney: Why a trend of recruiting central bankers from other countries?

17 days ago

Wide raging interview of Mark Carney in typical Tyler Cowen style. Lots of insights with wit thrown in between.
COWEN: Now, this — yourself through Stanley Fischer — as you know, there’s a trend of recruiting central bankers from other countries. So far, it seems it’s worked quite well. But what are the limits of this process of recruiting leaders in government from abroad? You wouldn’t name someone to run the Department of Defense who is from another country, right?
CARNEY: Yes.
COWEN: What’s the margin where that doesn’t work anymore?
CARNEY: Well, candidly, I think it was a relatively unique set of circumstances when I was put in place. The UK had had a very bad financial crisis. We had a new central bank, in other words; the powers had been tripled, it had been doubled in size.

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The ghost of Smoot-Hawley tells why America isn’t too big to avoid retaliation

17 days ago

Kris Mitchener, Kevin O’Rourke and Kirsten Wandschneider in this voxeu research:
The Trump administration’s pursuit of protectionist trade policies was predicated to some extent on the belief that America was too lucrative a market to face retaliation. Using the most detailed data set of bilateral trade flows constructed to date for the interwar period, this column shows that in fact the US faced substantial and widespread retaliation from trade partners in response to protectionist measures employed in the wake of the Great Depression. Exports to retaliating countries fell by as much as 33%.

…..
Peter Navarro was mistaken in 2018, and economic history suggests that this should have come as no surprise. Trade data suggest that the US faced widespread retaliation against Smoot-Hawley,

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Grave sites of famous economists

18 days ago

Prof Malcom Rutherford of Univ of Victoria has compiled pictures of grave sites of famous economists:
This web page contains details of the grave sites of famous economists. Where possible original photographs are included, otherwise a link is provided to pictures available on findagrave.com or on another site. I have also provided links to Wikipedia pages concerning the economists listed and to the graveyards or churches where they can be found. Wikipedia entries are not entirely reliable, but I was struck by how may of the economists listed here have Wikipedia pages. Perhaps by including these links some of my colleagues in the history of economics might be motivated to improve the entries on Wikipedia. I am also always interested in new pictures and information on the whereabouts

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Amalgamation of District Central Co-operative Banks with the State Co-operative Bank

18 days ago

RBI has issued guidelines for amalgamating District Central Co-operative Banks (DCCBs) with the State Co-operative Bank (StCB):
The Banking Regulation (Amendment) Act, 2020 (39 of 2020) has been notified for the State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) with effect from, April 1, 2021 vide Notification dated December 23, 2020 issued by Government of India. With the issue of the notification, the amalgamations of the above banks have to be sanctioned by Reserve Bank of India in terms of the provisions of the Section 44-A read with Section 56 of the Banking Regulation Act, 1949.
In recent past, a few State Governments approached RBI for amalgamation of DCCBs with the StCB as a two-tier Short-term Co-operative Credit Structure (STCCS). In order to

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150 Years of the Austrian School of Economics

18 days ago

Birth of Austrian School started with Carl Menger’s Principles of Economics published in 1871
Nicolas Cachanosky of Metropolitan State University of Denver in this research paper celebrates 150 years of Austrian School:

The year 2021 marks the 150th anniversary of Carl Menger’s Principles of Economics, the Austrian School of Economics’ foundational work. This paper looks at the most relevant work this school of thought has produced during the last century and a half. The Austrian School has worked on pressing topics of their time and is well aligned with the work being developed in “mainstream” economics.
How did the word mainstream economics come about?

This entry was posted on May 27, 2021 at 7:20 pm and is filed under Academic

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Thinking about public and private money

18 days ago

Jon Cunliffe of Bank of England in this speech takes one through some foundational issues about money:
In the UK, the Bank of England – a public institution– has been issuing money to the public for over 300 years. Its banknotes, carrying the famous “I promise to pay the bearer” pledge are carried in millions of wallets and purses and used millions of times every day by the public to make transactions.
These notes and coins are denominated in Pounds Sterling, the currency of the UK. It is the Bank of England, on behalf of the state, that is charged with ensuring the stable value of the currency by keeping inflation at its 2% target.
Public money for general use in the UK is only available in the form of physical cash. It is highly visible, trusted and, indeed, is probably the image

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