ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Macro-Economic Policy in Times of Globalisation

Why, under certain circumstances, does a government find itself incapable of pursuing expansionary economic policies even in situations characterised by industrial stagnation and accumulating foreign exchange reserves? This is an important theoretical issue suggested not only by the current Indian context but also other historical contexts, e g, Thatcherite Britain.

International Capital and National Economic Policy-A Critique of India s Economic Reforms

While internationalisation of capital has entailed the end of the old fashioned agenda of economic nationalism, it does not logically entail an end to the agenda of economic nationalism per se, it is no accident that the only success stories of growth from within the third world in the context of internationalisation of capital have been countries which have pursued a relentless policy of economic nationalism, while those that pursued a

Credit, Inflation and Deflation-Some Theoretical Comments in the Indian Context

Credit, Inflation and Deflation Some Theoretical Comments in the Indian Context Prabhat Patnaik Since inflation in the Indian context is widely accepted as involving a squeeze on workers, especially the large numbers of unorganised workers whose wages are not indexed to cost of living increases, it is often suggested that controlling inflation through a tightening of credit availability has ipso facto the opposite effect of making the workers' position relatively more comfortable.

Devaluation, Dual Exchange Markets and Existence of an Equilibrium in a Flexible-Rates Regime-A Theoretical Note

Devaluation, Dual Exchange Markets and Existence of an Equilibrium in a Flexible-Rates Regime A Theoretical Note Prabhat Patnaik This paper argues that a transition to an open economy flexible exchange rate regime may not be followed over time even by successful export-led growth. This point is being made by many; a possible theoretical under- pinning for it is provided here, namely, that allowing freedom to capital flows in third world conditions is likely to create a situation where more capital wishes to flow out of the country than wishes to flow in; and, under such conditions, reducing the level of activity in the country via a squeeze on real wages and investment caused by a depreciating exchange rate, as a means of stabilising the economy is both economically absurd as well as socially pernicious.

PERSPECTIVES

Writing about Hindu-Muslim Riots in India Today Gyanendra Pandey The dominant nationalist historiography that insists on the totalising standpoint of a seamless nationalism needs to be challenged not only because of its interested use of categories such as 'national' and 'secular' but also because of its privileging of the so-called 'general' over the particular, the larger over the smaller, the 'mainstream' over the 'marginal

Aspects of the World Capitalist Economy in the 1980s

Aspects of the World Capitalist Economy in the 1980s Prabhat Patnaik Economic booms, characterised by rapid capital accumulation and a plethora of new processes and new products, are founded on crises, which periodically purge the economy of obsolescence. Artificially arresting the crises, through budgetary deficits, as is being done today in the US, can only lead to the 'crisis of postponed crisis'. The capitalist world may well attempt solutions to its current crisis which augur ill for the third world.

BOP Problems of Developing Countries and International Division of Labour-Some Theoretical Comments

International Division of Labour Some Theoretical Comments Prabhat Patnaik This paper examines the proposition that, apart from minor modifications such as those arising from the infant industry argument, a regime of universal free trade represents the optimal trade arrangement for each of the participants in international trade Those who advocate trade liberalisation for underdeveloped countries necessarily subscribe to this proposition implicitly, though it is rarely, if even spelt out in theoretical terms.

Recent Growth Experience of the Indian Economy-Some Comments

Some Comments Prabhat Patnaik In an economy of the size and with the characteristics that India has, the stimulus for industrialisation has to come from agriculture rather than from the external sector. Industry has to grow by 'exporting' domestically to the agricultural sector, rather than abroad. For this an acceleration of agricultural growth is necessary which in turn requires a restructuring of agrarian relations, larger public outlays directed towards agriculture and with better regional spread, and fair' terms of trade and marketing arrangements.

Public Debt as a Mode of Financing Public Expenditure-Some Comments

Public Debt as a Mode of Financing Public Expenditure Some Comments Prabhat Patnaik This paper contests the view that selling government securities to buyers other than the Reserve Bank of India as a means of financing public expenditure is less inflationary than selling securities to the Reserve Bank. This view has recently received the support of even the Chakravarty Committee on the working of the monetary system. The first two sections of the paper focus primarily on the behaviour of banks and the processes of money creation and inflation, on the assumption of a given monetary policy-complex, notably a given spectrum of interest rates; Section III explores briefly the effect upon inflation and distribution of income of a rise in the interest rate on government securities.

New Turn in Economic Policy- Context and Prospects

New Turn in Economic Policy Context and Prospects Prabhat Patnaik The growth strategy being pursued by the government, it is argued here, apart from its other economic, social and political consequences, does not even promise any great achievements. This is not to plead for a restoration of the earlier economic regime whose contradictions have paved the way for 'liberalisation' in the first place. Rather, these contradictions have to be overcome, but in a manner completely different from, and opposed to, what the World Bank and other agencies have been advocating. Not only must the orientation of economic policy change visibly in favour of the working people, but the implementation of policy must itself be based upon the active participation of the working people. Such a change would also have the effect of raising the working people above their preoccupation with economism and narrow sectional interests.

Some Implications of Economic Strategy Underlying 1985-86 Budget

Underlying 1985-86 Budget Prabhat Patnaik The Budget for 1985-86 espouses a new economic strategy which, it is claimed, will accelerate the rate of growth of the economy. The author argues that the credentials of the strategy in this regard are highly dubious. If anything, it entails contractionary possibilities in the short or even medium term. Additionally, it is almost certain to have adverse balance of payments implications, necessitating larger foreign borrowings. It also entails in certain situations greater inflationary possibilities insofar as larger Budget deficits are resorted to for financing tax concessions.

Liquidity, Prices and Growth-A Note

Liquidity, Prices and Growth A Note Prabhat Patnaik Amal Sanyal This note tries to outline briefly a theoretical framework for analysing the interaction between the monetary and the real sectors of an economy like ours. This framework differs both from the Keynesian and the monetarist ones.

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