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Amol Agrawal: Mostly Economics

Mostly Economics is an India focussed economics research blog run by Amol Agrawal. He covers a wide range of economic topics while frequently updating his audience on the Indian economy.

History of Money (Part III) | From Bitcoin to central bank digital currency

The third and final part of the series on history of money has been released. The three part series is as follows: History of Money (Part I) | From cowries to cryptocurrency  History of Money (Part II) | Currencies, banking and crises History of Money (Part III) | From Bitcoin to central bank digital currency Happy reading. This entry was posted on March 5, 2021 at 2:36 pm and is filed under Academic research & research papers,...

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How Bahamas, Sri Lanka, and Uganda fight the pandemic’s disruption with technological innovation

Steven Dorst in this IMF article reflects on lessons from three countries: Never let a serious crisis go to waste.” Innovators around the world are taking the saying seriously, responding to the disruption caused by the COVID-19 pandemic with creative digital solutions. The initiatives we highlight here are markedly diverse: the overnight transformation of Sri Lanka’s 125-year-old live tea auction; the world’s first central bank digital currency in The Bahamas; and the rapid pivot from a...

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Investor size, liquidity and prime money market fund stress

Fernando Avalos and Dora Xia in this BIS research: Massive redemptions at money market funds (MMFs) investing primarily in high-quality short-term private debt securities were an important feature of the market dislocations in March 2020. Building on previous studies of the underlying drivers, we find that large investors’ withdrawals did not differentiate across prime institutional MMFs according to these funds’ asset liquidity positions. We also find that, faced with large redemptions,...

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What Are the New Inflation Hawks Thinking?

Prof Brad Delong writes for Proj Syndicate: After so many years of hand-wringing over disappointing US economic growth, it is odd to hear prominent economists sounding the alarm about the mere possibility of inflation. If anything, we should want an economy in which a higher federal funds rate is warranted. This entry was posted on March 5, 2021 at 11:07 am and is filed under Academic research & research papers, Central Banks /...

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An IMF economist explains central bank digital currency to his mother

Tommaso Mancini-Griffoli in this IMF article: My dear mother, I hope this letter finds you well, back in Italy. We are fortunate to have just visited; now we’ll go back to seeing each other on screen for a few months. Still, how far we’ve come since the immigrants of the last century who could only write letters—and hope they would eventually arrive. And yet, as I unpacked, I found remnants of our visit: euro notes, unused from my trip and now souvenirs of my stay. If only I could send...

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Greening (runnable) brown assets with a liquidity backstop

Eric Jondeau, Benoit Mojon and Cyril Monnet in this new BIS paper: In anticipation of a risk of runs on brown assets and a resulting pooling equilibrium, low- and high-emissions firms are not easily differentiated by external investors. As a result, all firms face the same initial funding costs ahead of production, and some high-emissions firms will be unable to subsequently refinance their activity because investors will not take the risk of financing them. The findings also show that a...

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The tale of the three stabilities: price stability, financial stability and economic stability

Governor François Villeroy de Galhau of Banque De France in this speech: The past twelve months have seen some of the most dramatic events since World War II, with this unprecedented pandemic. For this reason, and given that today is about the Financial Stability Review, I will focus on the concept of stability itself. Other sources of instability have affected the world economy in the past decade or so: the Global Financial Crisis and ensuing recession, the European Debt Crisis, or...

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Kidney Exchange: An Operations Perspective

New NBER paper by Itai Ashlagi and Al Roth: Many patients in need of a kidney transplant have a willing but incompatible (or poorly matched) living donor. Kidney exchange programs arrange exchanges among such patient-donor pairs, in cycles and chains of exchange, so each patient receives a compatible kidney. Kidney exchange has become a standard form of transplantation in the United States and a few other countries, in large part because of continued attention to the operational details...

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Ahmedabad University’s 2nd Annual (virtual) Economics Conference: 4-6 Mar 2021

Ahmedabad University’s 2nd Annual (virtual) Economics Conference is coming up this week. Interested can register here. Schedule of conference is here: Ahmedabad University will hold its “2nd Annual Economics Conference, 2021” from 4th – 6th March, 2021. The theme of the Conference is “Economics in Challenging Times”. Due to the continued uncertainties related to the COVID-19 pandemic, the conference will be held via the online platform. This year, we are inviting more than 20...

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State Bank of Sikkim: The Tiny Mountain Bank That Continues To Beat RBI’s Powers

Superb piece by Riddhima Saxena of BQ on the mystery named State Bank of Sikkim. SBS was established in 1968 and has remained outside of RBI purview. There are talks that it is now being brought under RBI but there is no mention of it on websites of either RBI or SBS. Riddhima points to this interesting CAG report on Sikkim which has some details on SBS: There are three Statutory Corporations in the State, namely, State Bank of Sikkim, State Trading Corporation of Sikkim and Sikkim...

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