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

A+| A| A-

Not a Keynesian Moment?

Avinash Persaud (“A Keynesian Moment? Hardly”, EPW, 27 November 2010) bases himself on two premises: (a) precautionary savings are not at too high a level to create unemployment equilibrium; and (b) the world’s reserve currency is “issued by a country in permanent deficit” (p 10). Because of this there is an accumulation of US dollars in several Asian countries which enjoy surpluses. There is thus a seeming glut of savings in the rest of the world. As a result, the deficit economy is under pressure to adjust. He believes that in this situation “every country is incentivised to come up with policies that promote balanced growth except for one country” (p 11), i e, the country issuing the reserve currency. He is, in other words, suggesting that the Chinese yuan (renminbi) should appreciate sufficiently to prevent a balance of payments surplus.

Leaving the issue of revaluation of the renminbi on the one side, the questions that arise in this context are the following:

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here


To gain instant access to this article (download).

INR 59

(Readers in India)

$ 6

(Readers outside India)

Support Us

Your Support will ensure EPW’s financial viability and sustainability.

The EPW produces independent and public-spirited scholarship and analyses of contemporary affairs every week. EPW is one of the few publications that keep alive the spirit of intellectual inquiry in the Indian media.

Often described as a publication with a “social conscience,” EPW has never shied away from taking strong editorial positions. Our publication is free from political pressure, or commercial interests. Our editorial independence is our pride.

We rely on your support to continue the endeavour of highlighting the challenges faced by the disadvantaged, writings from the margins, and scholarship on the most pertinent issues that concern contemporary Indian society.

Every contribution is valuable for our future.