Federal Reserve Bank of St. Louis
http://ideas.repec.org/f/pda314.html
My View
1. How to control inflation?
That too much money is chasing too few goods is self-evident. There is now more purchasing power in the hand of organized sector employees, who constitute a sizable chunk of middle class and public by large is more than before interested in real estate investment whenever more liquidity available. Hence what is necessary is a combination of moping up some of excess purchasing power and increasing productivity of the economy instead of raising interest rate which discourages investment? Then why not finance the additional productivity with above excess purchasing power? So government would need more money to finance productive activities and hence need to issue more debt, i.e. T-bills and dated securities. The financial system may not be able/willing to absorb it since nowadays average risk appetite of the market participants have increased and they prefer corporate bonds and other instruments offering higher returns as revealed by perusal of the changes in the composition of investment portfolios of corporates and FIs over last couple of years. So central bank may need to come in the picture to rescue the government, but this is tantamount to printing money. Better increase the income tax exemption limit income slab-wise (as per progressive taxation principle in normative economic sense). It should not be uniform for everybody and a part of that exemption may be allotted to govt securities, e.g. instead of 20000/- for infrastructure bonds, make it 1 lac additional investment in govt securities, this 1 lac should not be constant irrespective to the level of annual income. Rather the % of annual income allowed for exemption may be like 10% for those whose income is below 10 lacs, 20% for those with income between 10 and 20 lacs and so on. Similar practice may be introduced for corporate tax. Overall there should be tax incentive to every entity for investment in public debt.
Above is the reply from an administrative perspective.
From academic perspective, I think India may be entering the crisis zone of capitalism with an explicit need to invoke a post-Keynesian and neo-classical synthesis, the culprit behind the crisis may not be the asset bubble but it may be black-money bubble, which again is an issue of how you define it and essentially a fruit of market failure. The solution may not be located in an economic framework where fund pricing amounts to setting interest rate (a legacy of J R Hicks etc). But the current framework cannot be dismantled on the eve of Basel III era. Hence crises would be there in some form or other.
2. The day after SBI stock touched 52-week low, I was asked by a neighbor "suggest some good buy?" I replied "SBI or any other stock included in CNX or Nifty whose prices are low now and hold them for long period.""Why?""These will as usual catch up the trend behavior after sometime"."Is not the economy down when stock market crashes""If economy means shareholders, yes it is; if it means savers, then it is the good time to buy select stocks; if it means the component of our society who are in a position to neither save nor invest, I shall say when stock market is up they do not reap any benefit - so the question of their suffering out of plunging indices do not arise""But if RBI hikes rates again floating rate borrowers for car, housing etc will suffer""At the same time prices of car and property would also increase in a price spiral and hence sellers benefit. This is a redistribution of income. With every combination of economic variables emerges some unique pattern of income distribution - there is one to one correspondence, you cannot have one without the other". "You economists give ornamental names to stress events"."That is why I like to interview us once and often"(Dear Reader, Please give feedback whether I am wrong/right and to what what extent.)
That too much money is chasing too few goods is self-evident. There is now more purchasing power in the hand of organized sector employees, who constitute a sizable chunk of middle class and public by large is more than before interested in real estate investment whenever more liquidity available. Hence what is necessary is a combination of moping up some of excess purchasing power and increasing productivity of the economy instead of raising interest rate which discourages investment? Then why not finance the additional productivity with above excess purchasing power? So government would need more money to finance productive activities and hence need to issue more debt, i.e. T-bills and dated securities. The financial system may not be able/willing to absorb it since nowadays average risk appetite of the market participants have increased and they prefer corporate bonds and other instruments offering higher returns as revealed by perusal of the changes in the composition of investment portfolios of corporates and FIs over last couple of years. So central bank may need to come in the picture to rescue the government, but this is tantamount to printing money. Better increase the income tax exemption limit income slab-wise (as per progressive taxation principle in normative economic sense). It should not be uniform for everybody and a part of that exemption may be allotted to govt securities, e.g. instead of 20000/- for infrastructure bonds, make it 1 lac additional investment in govt securities, this 1 lac should not be constant irrespective to the level of annual income. Rather the % of annual income allowed for exemption may be like 10% for those whose income is below 10 lacs, 20% for those with income between 10 and 20 lacs and so on. Similar practice may be introduced for corporate tax. Overall there should be tax incentive to every entity for investment in public debt.
Above is the reply from an administrative perspective.
From academic perspective, I think India may be entering the crisis zone of capitalism with an explicit need to invoke a post-Keynesian and neo-classical synthesis, the culprit behind the crisis may not be the asset bubble but it may be black-money bubble, which again is an issue of how you define it and essentially a fruit of market failure. The solution may not be located in an economic framework where fund pricing amounts to setting interest rate (a legacy of J R Hicks etc). But the current framework cannot be dismantled on the eve of Basel III era. Hence crises would be there in some form or other.
2. The day after SBI stock touched 52-week low, I was asked by a neighbor "suggest some good buy?" I replied "SBI or any other stock included in CNX or Nifty whose prices are low now and hold them for long period.""Why?""These will as usual catch up the trend behavior after sometime"."Is not the economy down when stock market crashes""If economy means shareholders, yes it is; if it means savers, then it is the good time to buy select stocks; if it means the component of our society who are in a position to neither save nor invest, I shall say when stock market is up they do not reap any benefit - so the question of their suffering out of plunging indices do not arise""But if RBI hikes rates again floating rate borrowers for car, housing etc will suffer""At the same time prices of car and property would also increase in a price spiral and hence sellers benefit. This is a redistribution of income. With every combination of economic variables emerges some unique pattern of income distribution - there is one to one correspondence, you cannot have one without the other". "You economists give ornamental names to stress events"."That is why I like to interview us once and often"(Dear Reader, Please give feedback whether I am wrong/right and to what what extent.)
Acknowledgement
All my acheievements are attributed to my mother's struggle for my welfare. Rituparna Das
Product VAR Modeling
http://ebooks.worldscinet.com/ISBN/9789814354998/9789814354998_0002.html, World Scientific author Thomas Sargent got nobel prize in Economics in 2011.
My contributions in interdisciplianry teaching
In addition to my core competence areas, which I have already delivered at NLU, e.g.
1.Financial Management (BBA III semester and MBA(Insurance) II Semester),
2.Managerial Economics (BBA II Semester and MBA(Insurance) I Semester),
3.Principles and Practice of Banking (BBA IV Semester),
4.Derivatives (MBA(Insurance) III Semester),
5.Management of Financial Services (MBA(Insurance) IV Semester)
6.Project Finance (MBA-MBL/LLM V Semester) etc
there are other different interdisciplinary subjects, where I have the expertise in terms of international publications and teaching experiences of one and half decades at the Institutions like NLUJ, National Institute of Bank Management Pune (RBI’s training establishment), WB National University of Juridical Sciences Kolkata, Indian Institute of Social Welfare and Business Management Kolkata (IISW&BM) and Goenka College of commerce and Business Administration Kolkata to contribute in a fruitful manner:
1.Corporate Law (LLM (Corporate Law) I Semester): Study of this course calls for prior knowledge of different functional areas of the corporate houses. Since a corporate house is a profit making body, Corporate Finance for the purposes like capital budgeting becomes the central pillar in successful governance of the corporate house. There will be a difference in understanding between a student who read Corporate Law as stand-alone from Corporate Finance and another who read it along with Corporate Finance.
2.Management Information System (MBA (Insurance) III Semester): The application of MIS consists of, inter alia, use of different softwares in investment portfolio management, asset liability management, regulatory compliances and financial modeling like cash flow projection etc. To teach MIS without computer-practices is similar to teach cycling/swimming without cycle/water. Knowledge of these is of immense use in Corporate Houses and Financial Institutions and expected from management students.
3.Investment Law (LLM II Semester): Study of this subject presupposes knowledge of (i) the process investments in on-balancesheet items like fixed capital, plant and machinery and financial investment, and off-balancesheet items like derivative contracts; any of these may involve transactions in multiple currency; (ii) prudential norms of above investments, and (iii) valuation and risk analytics as per regulatory guidelines. Quality of work in a law firm dealing with cases relating to investments becomes better with above knowledge.
4.Law of Infrastructure Development (LLM II Semester): This subject revolves around infrastructure projects for which project finance is the sine qua non. For a legal professional dealing with infrastructure development without the knowledge of strategic and regulatory aspects of project finance it is difficult to understand the project blueprint as well as the way the promoters manage the project.
5.Environmental Law (LLB VII Semester): A review of the treatment of this subject in major Universities in USA reveals that it can best be taught jointly with Environmental Economics because every environmental regulation is deemed to possess twin aspects of administrative and social costs and social benefits in a market based economy but in the emerging economies like India the externality aspects of environmental risk assessment in infrastructure project finance and technological innovation and diffusion are also going to be counted. When market fails to allocate resources efficiently to lead to the greatest social welfare it is imperative to compare alternative environmental regulations in terms of costs and benefits. In short Environmental Law and Environmental Economics are inseparable.
6.Jurisprudence (LLB VIII Semester): This subject contains several elements of economic theories (e.g. Theory of Utility) because economic reasoning is supposed to (a) explain the trade-off between justification and consistency of legal practice, (b) provide a framework of modeling legal outcomes, and homogenous objectives for unifying heterogeneous areas of legal activity, (c) examine how people’s behavior in a legal frame are influenced by rationality; (d) examine how legislation is effected by collective behavior; (e) help designing strategic action in a legal context. In a word, without inputs from Economics discipline Jurisprudence subject can not be delivered in a wholesome manner.
7.Quantitative Techniques and Business Statistics (BBA I Semester and MBA(Insurance) II Semester): The application of statistics in business consists of, inter alia, use of the tools like regression, standard deviation, hypothesis testing etc in forecasting demand, forecasting security prices, computing risk in financial securities etc. Without prior estimation of demand it is risky to invest in new projects and without an estimation of risk profile it is not prudent to park funds in financial securities and derivatives.
1.Financial Management (BBA III semester and MBA(Insurance) II Semester),
2.Managerial Economics (BBA II Semester and MBA(Insurance) I Semester),
3.Principles and Practice of Banking (BBA IV Semester),
4.Derivatives (MBA(Insurance) III Semester),
5.Management of Financial Services (MBA(Insurance) IV Semester)
6.Project Finance (MBA-MBL/LLM V Semester) etc
there are other different interdisciplinary subjects, where I have the expertise in terms of international publications and teaching experiences of one and half decades at the Institutions like NLUJ, National Institute of Bank Management Pune (RBI’s training establishment), WB National University of Juridical Sciences Kolkata, Indian Institute of Social Welfare and Business Management Kolkata (IISW&BM) and Goenka College of commerce and Business Administration Kolkata to contribute in a fruitful manner:
1.Corporate Law (LLM (Corporate Law) I Semester): Study of this course calls for prior knowledge of different functional areas of the corporate houses. Since a corporate house is a profit making body, Corporate Finance for the purposes like capital budgeting becomes the central pillar in successful governance of the corporate house. There will be a difference in understanding between a student who read Corporate Law as stand-alone from Corporate Finance and another who read it along with Corporate Finance.
2.Management Information System (MBA (Insurance) III Semester): The application of MIS consists of, inter alia, use of different softwares in investment portfolio management, asset liability management, regulatory compliances and financial modeling like cash flow projection etc. To teach MIS without computer-practices is similar to teach cycling/swimming without cycle/water. Knowledge of these is of immense use in Corporate Houses and Financial Institutions and expected from management students.
3.Investment Law (LLM II Semester): Study of this subject presupposes knowledge of (i) the process investments in on-balancesheet items like fixed capital, plant and machinery and financial investment, and off-balancesheet items like derivative contracts; any of these may involve transactions in multiple currency; (ii) prudential norms of above investments, and (iii) valuation and risk analytics as per regulatory guidelines. Quality of work in a law firm dealing with cases relating to investments becomes better with above knowledge.
4.Law of Infrastructure Development (LLM II Semester): This subject revolves around infrastructure projects for which project finance is the sine qua non. For a legal professional dealing with infrastructure development without the knowledge of strategic and regulatory aspects of project finance it is difficult to understand the project blueprint as well as the way the promoters manage the project.
5.Environmental Law (LLB VII Semester): A review of the treatment of this subject in major Universities in USA reveals that it can best be taught jointly with Environmental Economics because every environmental regulation is deemed to possess twin aspects of administrative and social costs and social benefits in a market based economy but in the emerging economies like India the externality aspects of environmental risk assessment in infrastructure project finance and technological innovation and diffusion are also going to be counted. When market fails to allocate resources efficiently to lead to the greatest social welfare it is imperative to compare alternative environmental regulations in terms of costs and benefits. In short Environmental Law and Environmental Economics are inseparable.
6.Jurisprudence (LLB VIII Semester): This subject contains several elements of economic theories (e.g. Theory of Utility) because economic reasoning is supposed to (a) explain the trade-off between justification and consistency of legal practice, (b) provide a framework of modeling legal outcomes, and homogenous objectives for unifying heterogeneous areas of legal activity, (c) examine how people’s behavior in a legal frame are influenced by rationality; (d) examine how legislation is effected by collective behavior; (e) help designing strategic action in a legal context. In a word, without inputs from Economics discipline Jurisprudence subject can not be delivered in a wholesome manner.
7.Quantitative Techniques and Business Statistics (BBA I Semester and MBA(Insurance) II Semester): The application of statistics in business consists of, inter alia, use of the tools like regression, standard deviation, hypothesis testing etc in forecasting demand, forecasting security prices, computing risk in financial securities etc. Without prior estimation of demand it is risky to invest in new projects and without an estimation of risk profile it is not prudent to park funds in financial securities and derivatives.
Handbook of Fixed Income Securities Volume II: Monographs on Term Structure in India
Fixed Income Management practices carried out by the Banks in India are covered in ‘Handbook of Fixed Income Securities: Indian Banking Perspective' (ISBN 9783639255478) by the same author. Since the Fixed Income literature revolves around the term structure, this volume covers construction and behaviour of the same. The target audience includes officers in treasury and risk management departments of banks in India and students of investments and risk management. This book is also useful to those officers in banks in the emerging economies who lack the quantitative skills imperative for current style of fixed income management or who are not specialized in this area but transferred from a lending or marketing branch to the treasury or risk management department and entrusted with fixed income management.
URL: http://www.amazon.com/Handbook-Fixed-Income-Securities-II/dp/3639352637/ref=sr_1_5?s=books&ie=UTF8&qid=1304868746&sr=1-5
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