Archive for June, 2025
June 30, 2025
William L. Barcelona, Danilo Cascaldi-Garcia, Jasper J. Hoek, and Eva Van Leemput1 in this Fednotes:
Chinese authorities recently announced a growth target of “around 5 percent” for 2025, the same as their 2024 target. Five percent is about half the pace of growth that China sustained from the 1980s to the early 2010s, but it is nonetheless quite high for an economy flirting with deflation and mired in a years-long property bust. The ambitious growth target, given the circumstances, has led many observers of the Chinese economy to once again treat the official GDP data with skepticism. In this note, we revisit an alternative indicator of Chinese GDP growth developed by Barcelona et al. (2022) to examine whether official data overstate Chinese GDP growth.
Our findings suggest that recent GDP growth figures, which have been in line with the stated target, appear to align closely with broader Chinese economic indicators and do not appear to be overstated.
We find that the recent near-target growth has been driven by a strong supply-side performance, supported by sustained global demand for Chinese goods and industrial policies promoting self-reliance. This has helped offset weak domestic consumption, which never fully recovered from COVID-era lockdowns and continues to be constrained by the ongoing property slump.
Posted in Academic research & research papers, Central Banks / Monetary Policy, Economics - macro, micro etc, Financial Markets/ Finance | Leave a Comment »
June 26, 2025
Bhavesh Salunkhe, Sapna Goel, Amit Kumar, Preetika, Kunal Priyadarshi and Satyananda Sahoo in this RBI Bulletin article analyse impact of monetary policy on manufacturing firms:
Monetary policy plays a key role in influencing investment in fixed assets of manufacturing firms through the balance sheet channel – a mechanism where interest rate changes affect a firm’s financial health (cashflow and net worth) – which, in turn, impacts its borrowing capacity and investment decisions. Against this backdrop, the study examines the existence of balance sheet channel of monetary policy transmission in India.
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- The balance sheet channel of monetary policy transmission is active among Indian manufacturing firms.
- During monetary policy tightening, small firms (which, in general, face relatively greater financial constraints) rely more on internal funds for investment in fixed assets and vice versa.
- While both highly leveraged and less leveraged firms are affected by monetary policy through this channel, the difference in their sensitivity of investment to cashflow is inconclusive.
Posted in Academic research & research papers, Central Banks / Monetary Policy, Economics - macro, micro etc, Financial Markets/ Finance, Indian Economy/Financial Markets | Leave a Comment »
June 26, 2025
Payal Ghose of Clearing Corporation of India Ltd analyses the borrowing calendar of Indian goverment over two decades:
The release of the calendar for issuance of marketable dated securities is a closely tracked event in the Indian government securities (G-Sec) market following the announcement of the quantum of gross borrowing for the upcoming fiscal year in the Union Budget.
From the fiscal year beginning April 2002, the Reserve Bank of India (RBI) as the government’s debt manager releases half-yearly indicative calendars of issuances at end-March and end-September based on the estimates of the Government’s likely funding gap. The calendars contain details on the number and quantum of dated GSecs to be issued through weekly primary auctions during the ensuing half year, tenor of the securities to be auctioned and the time of auctions. This ” update to our previous articles Developments in the Primary Auctions Market in India” (January 2020) and “Managing Borrowings during Exceptional Times” (January 2023) analyses the execution of the annual borrowing plans since India’s transition to fully market determined auctions from April 1, 2006.
Posted in Academic research & research papers, Economics - macro, micro etc, Financial Markets/ Finance, Indian Economy/Financial Markets | Leave a Comment »
June 25, 2025
India’s political class has a new fascination: Hosting Olympics. Some of them are telling us how some of the cities where there jurisdiction lies are fit to host olympics! Really?
I mean when none of the cities are fit to keep its people, they are fit to host olymipcs? Where do these leaders get this arrogance and hubris from?
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June 25, 2025
Jan Toporowski of SOAS discusses Kalecki’s view of development in this INET article:
This paper commemorates the 70th anniversary of Kalecki’s seminal lecture in Mexico on financing economic development. The first part of this paper outlines the theoretical model underlying Kalecki’s view of development financing. A second part of the paper summarizes the foundations of structuralist development economics in the Prebisch-Singer approach to international trade and import-substitution development strategies. A third part of the paper examines the confrontation between Kalecki’s view of economic development strategy, and the structuralist approach, in the case of Cuba, highlighting the differences between the two approaches. A fourth part concludes with some reflections on the relevance today of structuralism and Kalecki’s view of economic development.
Posted in Academic research & research papers, Economics - macro, micro etc, Economist, Financial Markets/ Finance, Growth and development | Leave a Comment »
June 24, 2025
David Engerman of Yale Univ has written this book (yet to read): Apostles of Development: Six Economists and the World They Made.
Chanpreet Khurana of Moneycontrol interviews Prof Engerman:
The six economists of Engerman’s book – Jagdish Bhagwati, Amartya Sen and Dr Manmohan Singh from India, Rehman Sobhan from Bangladesh (then East Pakistan), Mahbub ul Haq from Pakistan and Lal Jayawardena from Sri Lanka – feature in almost every list of the most important development economists in the world. And, yet, Engerman says he found there was little appreciation for how development economics has historically been “a Global South project”.
That, he adds, was one of the reasons why he wrote the book: to foreground how ideas around development, poverty alleviation and addressing inequality were often coming from South Asian experts who were responding to the problems of their day and their countries – rather than flowing from the Global North to the Global South in the second half of the 20th century. Engerman offers some examples which get more detailed treatment in the book: Like, Pakistani economist Mahmud ul Haq’s championing of the Basic Needs approach at the World Bank, and the Human Development Index which he started in 1990. And Amartya Sen’s work in welfare economics, for which he won the Nobel Prize in 1998.
Worth reading…
Posted in Academic research & research papers, Economics - macro, micro etc, Growth and development, Indian Economy/Financial Markets | Leave a Comment »
June 24, 2025
A team of ECB economists (Bruno Buchetti, Michele Fabrizi, Elisabetta Ipino, Ixart Miquel-Flores and Antonio Parbonetti) on how and whether mafia influencea bank lending:
The infiltration of legitimate businesses by organized crime, particularly Mafia organizations, has long been a challenge in many parts of the world, including Italy. These criminal activities disrupt fair competition, suppress innovation, and distort economic markets, leading to reduced growth and increased inequality. This paper examinesthe impact of dismantling Mafia-connected firms through targeted anti-Mafia police actions on the financial sector, focusing on lending practices and credit availability.
One of the most significant insights from our paper is how the removal of Mafia-affiliated businesses affects both the volume of loans provided by banks and the costs of borrowing for businesses in the affected areas. The dismantling of Mafia-connected firms leads to a noticeable increase in lending to legitimate businesses in the same or neighboring areas. On average, firms in municipalities where anti-Mafia operations occurred experience a 0.8% rise in the loan amounts available to them. This effect is even stronger in regions with high levels of Mafia activity, with increases of up to 2.1%. These results suggest that removing criminal interference revitalizes the local economy, encouraging firms to expand and invest in the newly competitive landscape.
Posted in Academic research & research papers, Central Banks / Monetary Policy, Economics - macro, micro etc, Financial Markets/ Finance | Leave a Comment »
June 18, 2025
Cdr KP Sanjeev Kumar, a former Navy test pilot digs deep into tender documents issued by Uttarakhand Civil Aviation Development Authority (UCADA) to show how tourist lives ar cheap in India:
In the post, Cdr Kumar compares how heli services in Mumbai High with Uttarakhand which is worth reading. One is professional and another anything but professional.
A glimpse into UCADA tender:
In a country where people die in stampedes and fall off the footboard of moving trains without doors in the 21st Century, who should be the final arbiter for safety? The pilgrim who has been given the opportunity to buy a helicopter ticket cheaper than a pony ride? Or a ‘2+1 helicopter company’ who wants to ‘extract maximus’ from the milk cow of the industry? Or UCADA, whose website, replete with spelling mistakes and “no data found”, gives a glimpse into how cheap a pilgrim or tourist’s life is in India?
Look at the odds. And the irony. Listed below are some of the clauses extracted from a recent tender floated by UCADA for the selection of a helicopter shuttle operator from Joshiyara to Gangotri:
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- Operator will have to provide 10 flying hours (on non-chargeable basis) each Yatra season to meet exigencies as determined by UCADA. Each operator will provide the flying hours when directed by UCADA, failure is doing so will attract a penalty of Rs 02 lakh each time. In such a case the balance number of hours will remain unchanged. For utilization of these hours a roaster will be followed. These services will be provided as per the direction of CEO, UCADA.
- When the helicopter is requisitioned by UCADA and if any operator refuses or shows inability, a penalty of Rs 02.00 lakh will be levied.
- Withdrawal of any helicopter on the grounds of reduced pilgrim traffic etc. shall be allowed only after the Operator has obtained the specific written approval of the Chief Executive Officer/ Addl. Chief Executive Officer, UCADA failing which a penalty @ Rs 20,000/- per scheduled flying hour (subject to a maximum of Rs. 100,000/- per day) shall be liable to be imposed. The above penalty shall also apply in case the Operator suspends flying beyond 24 hours, on account of some technical snag/ non availability of pilots or any other reason whatsoever. The penalty amount shall be double in the subsequent days of suspended operations i.e. Rs. 40,000/- per scheduled flying hour (subject to a maximum of Rs. 200,000/- for 2nd day), Rs. 80,000/- per scheduled flying hour (subject to a maximum of Rs. 400,000/- for 3rd day) and so on till 07 days after which the contract of the successful operator can be cancelled.
- The Company shall carry out the flight operations daily, with least inconvenience to the Yatris, subject to fair weather conditions and clearance by the ATC/Competent authority. (to be clear, there is NO ATC or “competent authority” in Chota Char Dham sector except for pilots).
- Each pilot operating Shuttles will be permitted a maximum of 50 landings in a day and the bidder will comply with DGCA CAR Section-7 Series-J Part-II without any aberrations.
- The booking of heli tickets for shuttle services will be 100% online through website authorized by UCADA. 03% (Inclusive of GST) of the tariff of each booked ticket as Yatra Facilitation Charges shall be charged by UCADA from shuttle operator. (This is like booking airline tickets through DGCA!)
- Booking charges/convenience fees over and above the ticket charges shall be collected from the passenger by the ticket booking agency authorised by UCADA. Dynamic pricing system over and above the L1 rate may be introduced. The SOP for the dynamic pricing system will be as directed by UCADA which will be binding on all the selected bidder.
- The Operator shall pay royalty inclusive of GST equal to Rs 5,000 per landing at all government owned helipads. The royalty amount has to be deposited on weekly basis. Shuttle royalty shall also increase by 05% with every extension in contract.
- All other equipment/infrastructure for communication, meteorological facilities, medical facilities, fire-fighting and safe flying operation etc shall be the sole responsibility of the Operator, who shall provide it as per norms prescribed by DGCA/ other agencies.
- When the helicopter is requisitioned by UCADA and if any operator refuses or shows inability, a penalty of Rs 02.00 lakh will be levied.
- Withdrawal of any helicopter on the grounds of reduced pilgrim traffic etc. shall be allowed only after the Operator has obtained the specific written approval of the Chief Executive Officer/ Addl. Chief Executive Officer, UCADA failing which a penalty @ Rs 20,000/- per scheduled flying hour (subject to a maximum of Rs. 100,000/- per day) shall be liable to be imposed. The above penalty shall also apply in case the Operator suspends flying beyond 24 hours, on account of some technical snag/ non availability of pilots or any other reason whatsoever. The penalty amount shall be double in the subsequent days of suspended operations i.e. Rs. 40,000/- per scheduled flying hour (subject to a maximum of Rs. 200,000/- for 2nd day), Rs. 80,000/- per scheduled flying hour (subject to a maximum of Rs. 400,000/- for 3rd day) and so on till 07 days after which the contract of the successful operator can be cancelled
And here’s the clincher!
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- UCADA shall not be liable for what-so-ever consequences arising out of any accident, incident, mishap, or any event relating to the operation of the helicopter services of the Operator, who shall be solely and exclusively liable for any injury, damage or liability of any kind arising directly or indirectly out of its operations.
In the end, it is all about propaganda and marketing:
Thanks to all the hardsell coupled with the pull of cheap tickets, the hill shrines of Yamunotri, Gangotri, Kedarnath and Badrinath have been seeing footfalls like never before. Shrine boards and the UCADA have been incentivising this feeding frenzy with no real investments in infrastructure or safety management systems. To make matters worse, operators hire ex-military pilots with hill flying experience and incentivise them with cash bounties that draw them away from well-regulated sectors like offshore. It can only go south from here.
The situation is so bad, helicopter operators can learn a thing or two from pony operators who seem to have a higher benchmark for what works in the hills and what doesn’t. The flawed financial model at the root of this unholy heli-tourism sector merits greater scrutiny and could well hold the keys to solving the puzzle. Meanwhile, as fare-paying passengers, please do your due diligence and take the safer option till further advice. As it seems, nobody has your back.
If the triumvirate of MoCA, UCADA and DGCA has succeeded in one mission, it is to unite the pilgrim with his/her Maker, as two fatal accidents in as many months have shown. It is about time pilgrims take responsibility for their own lives.
Signing off with thoughts and prayers for seven onboard the last flight of VT-BKA.
“Baba Kedar ki Jai”
Who cares? Lives are cheap.
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June 18, 2025
Sports scientist Mogammad Sharhidd Taliep in TheConversation article discusses difference between chokers and clutchers:
In sports psychology, choking has been defined as:
An acute and considerable decrease in skill execution and performance when self-expected standards are normally achievable, which is the result of increased anxiety under perceived pressure performance decline when highly motivated individuals are subjected to pressure.
Anxiety disrupts a player’s automatic motor response, leading to poor decisions and inaccurate skill execution. This happens at critical moments of the game. And the aftermath of these continued inferior performances can lead to a long-lasting stigma
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The opposite to choking is clutch performance. This can be defined as improved or maintained performance under pressure. Some of the contributing characteristics of clutch performances are confidence, complete and deliberate focus, automatic movements, and the absence of negative thoughts.
How did South Africa move to being clutchers? He points to role of the quiet eye:
Conrad emphasised the importance of removing distraction by telling them to “play the conditions” and not the situation. This allows players to focus on the moment and not be overwhelmed by the broader context of the match.
The calm and composed demeanour of Bavuma and Markram as they prepared to face the barrage of deliveries during their match-defining partnership also relates to a phenomenon scientists refer to as the “quiet eye”.
The quiet eye is the period of visual fixation or visual tracking of the body cues of the bowler and the early ball flight trajectory before the execution of a motor task. It’s been associated with superior performance under pressure.
Hmm..
I mean the burden on South African cricket was getting heavier and heaveir, Hope this lifts SA cricket forever and we see much more competitive cricket going forward.
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Mostly Economics 
