A monologue on macroeconomics
If US tech policy can be thought of as an algorithm, then it has been poorly designed. A faulty approach to AI policy, akin to an algorithm with embedded design flaws, will lead to faulty outcomes – viz. ceding lucrative markets abroad to Chinese competitors.
An econometric analysis to estimate the SGD NEER in Python using Pandas, SciPy and other relevant libraries. This can be used to construct a proxy FX basket to short or long SGD NEER.
A real world avatar of your undergrad National Income Accounting (NIA) lesson starring the Indian economy. The book argues that maintaining eight percent GDP growth over the long term involves accepting slower growth in the short run. This is a pushback against calls to speed up growth to eight percent urgently and at all costs.
The Pound was the fulcrum of the international gold standard and the world's reserve currency of choice during the century leading up to World War I. But all this did not prevent Britain from debasing it during the four years of conflict. After the war the pound was re-pegged to gold at an overvalued rate that failed to recognize the deterioration in its fair value. Additionally, the US and France accumulated gold in violation of the gold standard system. These dysfunctions led to a drying up of gold flows into Britain and eroded the Pound's credibility as a reserve currency. This is the first of two articles tracing the events leading to the Pound's break from the gold standard.
Two recent books on the Chinese economy offer different perspectives for the future. China's Great Wall of Debt by Dinny McMahon adopts a bottom up analysis to heavily discount China's capability of becoming an engine of global economic growth. The State Strikes Back by Nicholas Lardy addresses the question of China's growth potential with a top down analysis to arrive at a more open ended conclusion.
China is the world’s third largest creditor economy. This article discusses China’s international investment position (IIP) and it's major components. Monitoring a country's IIP is important because large gross positions can lead to greater exposure to external shocks.
As the world’s reserve currency of choice, the US dollar appreciates when the market perceives a scarcity of safe and liquid dollar assets. This happens when the Fed tightens its monetary policy or during times of global risk aversion. Besides, negative yields on the debt of alternative reserve currencies further reinforces dollar strength in the current scenario.
This book is a catalogue of the 2008-09 financial crisis by the three policy makers in the frontline for fixing the system. Mercifully light on details, it offers a broad introduction to the underlying causes and timeline of the crisis to new readers. Seasoned readers of the subject will find the charts section richly informative.
This article presents ten charts tracing the RMB internationalization journey over the past decade.
The realistic way forward for RMB internationalization is via RMB denominated financing for projects under the Belt and Road Initiative. The evolution in global RMB clearing breaks the dominance of offshore clearing centres while RMB payment cards give more people the opportunity to use the currency.
Macrologue 