My latest research from a heterodox macroeconomics perspective

Earlier this year, I had undertaken to carry out a few country studies from a heterodox macroeconomic perspective.  Three of them have now been published:

1. China’s macroeconomic policy options: a sectoral financial balances approach,Studies in Business & Economics, 2016, 11(1): 152-163.
   
    
2. Cracks in BRICs: a sectoral financial balances analysis and implications for macroeconomic policy, Theoretical and Applied Economics, 23(3), Autumn: 53-78.
   
    
3. Can a country really go broke? Deconstructing Saudi Arabia’s macroeconomic crisis, Real World Economics Review, Issue 76, September 2016: 75-94.
   
   
   The above articles can be read at:
   
   
   
   http://Independent.academia.edu/SashiSivramkrishna

Looking forward to some critical comments.

Can we make sense of all this?

Can we make sense from these three articles using macroeconomic theory that appeared in the Livemint, all on the same day?

A useful exercise for students to look at issues from a macroeconomics perspective.

http://www.livemint.com/Politics/Puwo4XzazcHApN5n1JK0eI/India-to-remain-the-worlds-fastest-growing-economy-IMF.html

http://www.livemint.com/Money/XGY7AWl1fNfNEsMWe0PMFO/If-economy-is-really-growing-74-why-is-consumer-sentiment.html

http://www.livemint.com/Money/1dgjHuBdeq6Tct7GwRGJ8I/PMI-data-shows-spluttering-economy-plunging-business-expect.html

Here's some more food for thought ....

Will these strategies work?  Are legislative reforms sufficient to ignite growth?  And what about employment?

http://www.newindianexpress.com/editorials/Onus-on-Both-Govt-India-Inc/2015/09/25/article3046432.ece

http://www.thehindubusinessline.com/companies/bilt-pulls-out-of-malaysia-sells-stake-in-sabah-forest-for-500-million/article7686130.ece

http://www.thehindubusinessline.com/opinion/editorial/chinks-in-make-in-india/article7686002.ece

MMT cautions us against reacting to such headlines

Fed said to have emergency plan to intervene if U.S. defaulted on debt

WASHINGTON | BY SARAH N. LYNCH AND JASON LANGE

Reuters, Markets | Mon May 11, 2015 6:59pm EDT

http://www.reuters.com/article/2015/05/11/us-usa-debt-idUSKBN0NW1YS20150511

This is what MMT is weary about ....

Union Budget 2015: FM Arun Jaitley hints at more cuts in spending

Ahead of the Budget 2015-16 to be unveiled later this month, Jaitley hinted at a stable tax regime, saying that 'no unfair effort' will be made by states and the Centre to mop up revenues.

Having already crossed the fiscal deficit target in November, Finance Minister Arun Jaitley today hinted at more cuts in spending so as to contain it within limits for the current fiscal, saying he does not believe in living on borrowed money.

"We're trying to rationalise expenditure as far as the government is concerned because we do not want the government to live on borrowed money indefinitely," he told a gathering of industrialists and planners here via video conferencing.

"The whole concept of spending beyond your means and leaving the next generation in debt to repay what we are overspending today is never prudent fiscal policy," he said. The additionally hinted spending cuts would be over and above 10 percent that the government has already announced to meet the budgeted 4.1 percent fiscal deficit target which was crossed in November itself -- four months ahead of the end of the financial year on March 31. 

…..

Read more at: http://www.moneycontrol.com/news/economy/fm-arun-jaitley-hints-at-more-cutsspending_1294457.html?utm_source=ref_article

IMF, India's fiscal deficits and the need to question the obvious

I just read a news report from Business Today (19-Sept-2014) that speaks of the IMF asking the RBI to raise interest rates.  The infatuation over fiscal deficits as being the most serious problem that Indian macroeconomic policy needs to address runs throughout the article.  But there were also some contradictions that I came across, reading between the lines.  Here are some statements from the article that I want to highlight:

"...IMF said the government needed to take more steps to reduce stubbornly high inflation and the large fiscal deficit."

"The IMF said removing supply bottlenecks would lead to more sustainable growth. It also called for increasing public spending on infrastructure to ease supply bottlenecks and support economic development."

"While lauding the new government's emphasis on fiscal consolidation, it said "the quality and durability of the consolidation remain a cause of concern.""

"The government proposes to bring down the fiscal deficit to 4.1 per cent of gross domestic product (GDP) in current year from 4.5 per cent last fiscal ... fiscal deficit has to be brought down to three per cent of the GDP by 2016-17."

On the one hand the IMF wants to cut the fiscal deficit while at the same time they want an increase in public spending on infrastructure.  When they say the quality of the deficit is important, what do they mean?  What are the items that the government should cut spending on?

Also, like MMT warns us, why this concern about fiscal deficit numbers like 4.1% and 3% of GDP?  Will achieving these numbers solve India's macroeconomic problems?

It's time for MMTers to question what is now being seen as obvious in India.



Follow this link to read the article in Business Today:

http://businesstoday.intoday.in/story/rbi-should-raise-policy-rates-to-cut-inflation-imf-g20-cairn/1/210504.html