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

Articles by A V RajwadeSubscribe to A V Rajwade

Can We Afford Build-up of External Liabilities?

Tracing the exchange rate policy post 1991, and particularly since 2007-08, it is argued that an exchange rate policy with an external account targeting approach is required to arrest the build-up of net external liabilities.

China's Global Economic Power

The dollar has been the world's reserve currency for decades, but it is not difficult to see it yielding place to the yuan of China, a country that is already the world's largest economy in purchasing power parity terms, and the world's largest manufacturer and exporter.

India's 'Dutch Disease' and the Exchange Rate

Finance capital inflows and inward remittances have held up India’s real exchange rate. Do these inflows constitute a kind of “Dutch Disease” which is rendering Indian manufactures uncompetitive?

External Sector, Growth and the Exchange Rate

India has to acknowledge that it needs to manage the exchange rate rather than claim it should be market-determined. The rupee remains overvalued. To avoid a balance-of-payments crisis caused by the large current account deficit what is needed is depreciation of the rupee to somewhere around Rs 70+ level and the adoption of tight, defl ationary monetary and fiscal policies which would be extremely bitter.

Margaret Thatcher (1925-2013)

Thatcher's impact on Britain can still be felt. A leader with clear, if divisive, convictions, her rule has transformed Britain. Ironically, for someone who ruled with such imperialist nostalgia, her policies have led to the economic and political eclipse of British power.

Liberal Capital Flows

How far are the arguments favouring the free movement of capital tenable from both empirical evidence and fi rst principles?

The Fall of the Rupee: Background, Remedy and Policy

It would appear that over the past couple of years the Reserve Bank of India has moved towards a policy of a market-determined exchange rate which is in line with the Anglo-Saxon beliefs. But if the objective is growth, jobs and financial stability, we need to go back to managing the exchange rate in order to maintain the external value of the rupee around a level which would keep the current account deficit within +/- 1% of GDP. If the cost of intervention and sterilisation becomes unaffordable, the solution would be to impose controls on capital movement, rather than giving up management of the exchange rate.

Argumentative Indian

The two pieces, respectively by Sasheej Hegde and Jaithirth Rao (April 14), provoked me to go back to the book The Argumentative Indian by Amartya Sen which I read some time back.

Hedge Funds

Owing to the substantial risks involved, hedge funds are normally open only to professional, institutional or otherwise accredited investors. This paper outlines the structure of hedge funds, the investment strategies pursued and possible returns.

Risks and Rewards of Capital Account Convertibility

This article discusses whether capital account convertibility can or should be an objective or a means towards achieving more fundamental macroeconomic goals. It presents an overview of the risks and rewards of convertibility and debates the issue of freely floating versus managed exchange rates and their implications for a developing economy.

Bush's War on Terror

The Bush administration's refusal to learn any lessons from its continuing disastrous presence in Iraq is only lending credibility to acts of terrorism worldwide and leading to a resurgent Taliban.

Performing under Constraints

There is no escaping the fact that the finance minister was under severe constraints in making this budget. Not much in the way of fiscal consolidation or redeployment of resources to socially worthwhile objectives could realistically have been expected.


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