My new book - In Search of Stability: Economics of Money, History of the Rupee

In Search of Stability:  Economics of Money, History of the Rupee

Sashi Sivramkrishna

Manohar, New Delhi 2015, 490 pages

ISBN 978-93-5098-100-9

In Search of Stability seeks to understand the economics of money through a narrative on the history of the rupee. The period delineated for study is from the time of introduction of the rupee by Sher Shah Suri in 1542 up to 1971, the year which marked the beginning of the end of the Bretton Woods era and a fixed exchange rate regime.

The underlying thread that runs through the narrative is the positive economics of money and history of the rupee.  This is a book that explains what happened rather than raising normative questions on what ought to have happened or what could have been a more appropriate monetary system for India.

The economics of money also draws us into understanding the evolution of monetary instruments through history and their impact on the economy.  These instruments cannot be separated from the institutions that develop and are developed by them.  A digression into a study of the origins, nature and development of some of the most important monetary institutions in India has therefore been included in this book.

While standards of living have risen enormously, money has struggled to maintain its value across place and time, without definitive success.  This has brought with it crises and severe hardship to entire societies; a lesson which the history of the rupee unequivocally reveals.

The book is available through the publisher, Manohar (New Delhi) or Amazon-India.  Below are the links.

http://www.manoharbooks.com/BookDetails.asp?bookid=140435&Page=1&subjec=%20%20Others%20%20%20%20%20(In%20Search%20of%20Stability:%20Economics%20of%20Money,%20History%20of%20the%20Rupee)

http://www.amazon.in/Search-Stability-Economics-Money-History/dp/9350981009/ref=sr_1_2?ie=UTF8&qid=1433221787&sr=8-2&keywords=sashi+sivramkrishna

The general drift of neoliberalism

Two headlines caught my attention today; from these we get a clear picture of the general drift of neoliberalism.   The Times of India (see link below) declared:

SOCIOECONOMICS: BIG TALK, TIGHT FIST

Funds cuts pinch edu & health schemes

Slashing the education budget and keeping the outlay on health static in Modi government's first Budget was seemingly based on the sound logic of the Finance Commission giving bigger share of taxes to states.

But three months later, harsh reality has sunk in. Mid-Day Meal (MDM) cooks, anganwadi workers and Mahila Samakhya workers have hit the streets and state governments are feeling the heat ….

http://timesofindia.indiatimes.com/india/Modiversary-Socionomics-Big-talk-tight-fist/articleshow/47378636.cms

The other headlines that was an interesting contrast to this was in the Livemint.

Industries call on Modi to spend Rs.1 trillion (Rs.100,000 crore) to boost economy

… At the top of India Inc.’s wish list are investments in infrastructure, simplification of rules for acquiring land and implementation of a proposed national sales tax. Executives say the government should take the lead in financing new roads and public projects to give the maximum boost to Asia’s third- biggest economy.

V.S. Parthasarathy, group chief financial officer at Mahindra and Mahindra Ltd, suggests Modi make a dramatic move by investing as much as Rs.1 trillion ($16 billion) on infrastructure in the next six months. That would provide the country with tangible assets, signal confidence in the future and inject cash that would cascade through the broader economy …

http://www.livemint.com/Politics/hdj6dPF4mtUUilQnHe8ShM/Indian-industry-calls-on-Modi-to-spend-Rs1-trillion-to-boost.html

So is industry really against spending and deficits per se or does it prefer one kind of spending to another?  And the government?  Let’s be clear.

My book entitled, "In Search of Stability:  Economics of Money, History of the Rupee" should be out soon.  As the title suggests, I have traced the history of the rupee from 1542 to 1971 and added an epilogue which extends the study up to present times,  All this is done from a positive economics standpoint.  The book, however, does not take a critical stand on the colonial regime by asking what would have happened if things had been different; say, for instance, if India would have been better off had we moved on to a gold standard instead of the gold exchange standard in the late 19th century.  Rather we explore what the gold exchange standard was and its implications of price and exchange rate stability for India.  With this understanding, students and economic historians could pose more critical questions for further study.  The book has been accepted for publication by Manohar Book Publishers, New Delhi, India.

After completing the book I was keen to further explore the more recent history of the rupee, specifically post-1971.  It is while to trying to find a suitable theoretical framework within which I could place my study that I came across Modern Money Theory or MMT.  Over the last few months I have gone through several books, blogs and videos by the main proponents of MMT.  It's not only fascinating but has opened up a whole new world for me.  I had studied Keynesian macroeoconomics during my M.A. at Bombay (now Mumbai) University but was then exposed to a completely different macroeconomics at Cornell while doing my Ph.D.; if I recollect rightly it was dynamic optimization (micro was supposedly static optimization).  Confused about what I was really learning from all those models, my interests shifted altogether to political economy.  Luckily for me I got back to teaching Macroeconomics 101 to management students in India and have been able to hold on to simple Keynesian theory.

My interest in the economic history of the rupee and Keynesian macroeconomics somehow comes together when I read through the literature on MMT.  As I mentioned, it has opened a new window for me to understand fiscal and monetary policies in India today.

I will share things that I come across from sources including newspapers, magazines and TV that I think are important and need a re-look.  I do not intend to make any theoretical contribution to MMT right now at least; those interested could Google "modern money theory" and easily find material from the masters. I think there is a dire need of MMT for India; this is where I hope to make some contribution.