An open economy macromodel, calibrated to typical institutions and shocks of a populous emerging market economy, shows that a monetary stimulus preceding a supply shock can abort inflation at minimum output cost, since of the appreciation of exchange rates, accompanying a fall in interest rates and rise in output. Analytic results obtained for two periods are generalized through simulations and validated through estimation. One instrument achieves both domestic output and exchange rate objectives, partly since it creates correct incentives for foreign exchange traders. Strategic interactions imply supporting institutions are required to coordinate monetary, fiscal policy, and markets to the optimal equilibrium.

https://mpra.ub.uni-muenchen.de/24310/1/MPRA_paper_24310.pdf

Incentives from exchange rate regimes in an institutional context

The Silk Roads Ethos (SRE; Ling, 2014) animates the idea that India and China must draw from the legacy of historical exchanges for future cooperation. Mainstream scholarship on the subject employs...

The wisdom of the road: Research and pedagogy on India-China and the Silk Roads Ethos (SRE)

.........................................................................................iii Table of contents ..............................................................................iv Abbreviations.................................................................................viii List of Figures ..................................................................................x

The importance of political institutions on the economic development of china (1992—2004): why the present political institutions of china require fundamental change

India is a success story of economic reforms Because of its vast size, it also provides a good example of having a wide network of research institutes, and effective linkages between development research, policy planning and outcome Country case study on India makes a critical appraisal of theses linkages attempted since 1991 in external sector reforms (which were very comprehensive and successful), privatization strategy and policies (which were incomplete and partially successful) and labor markets reforms (which remained non-starter and unsuccessful) Linkages between research-policy-implementation are very complex in a democratic set-up like India The study supports the findings of other studies on BRP that the political institutional context is the most important factor determining the scope and extent of linkages among research, policy and implementation Reforms in the external sector were most comprehensive and met lesser resistance from the political parties as the working class was not affected adversely by these policies On the other hand, progress of privatization and labor market reforms was slow and the scope was very limited due to political economy constraints Despite various studies done in India indicating substantial benefits from liberalization of labor markets over a medium and long term, Indian labor laws still remain highly restrictive Most of the research studies were ignored by the policy makers due to strong resistance from the trade unions and left parties who now support the coalition government at the centre Both researchers and policy makers agree that factors influencing successful uptake of research include significance and quality of research, good reputation of a research institute and its proximity to the government, qualifications and international experiences of policy makers, and involvement of all stakeholders from the early stages of research Another important lesson of the study is that most of the research is not policy oriented and many policies are not research based, while setting up working/ expert/ advisory groups serves as a key mechanism for bridging research and policy The study examines the strengths and weaknesses of interlinkages in terms of quality, relevance, extent of intra-communications, modes of links, dissemination and institutional arrangements, and recommends feasible measures for effective policy dialogue, efficient organizational and institutional set up and future policy agenda

Inter-linkages between Development Research and Policy Planning - Analytical Lessons from Indian Experiences in the Post Reforms Period

Even though democracy is the most popular form of government globally based on the rights it provides its subjects, there has always been a debate about how dictatorships have witnessed remarkable economic growth. To understand this debate, the constantly changing political and social scenarios around the world should be considered as well because, with the dawn of globalisation, the policy domains of every country witnessed a response-oriented characteristic in its decision-making. The economist and author Dambisa Moyo is one of the several intellectuals in the field of economics who deemed dictators to lead the economy better. The observation she made was targeted at the countries with economies in the worst condition. She believed democracy to be the next priority once economic stability is achieved, but this rekindles the debate of who performs better at the economic front.

/pdf/who-leads-to-better-economic-growth-dictatorship-or-2ni2pbce.pdf

Who Leads to Better Economic Growth? Dictatorship or Democracy?

We explore the hypothesis that macroeconomic polices are influenced by political structure, through a systematic comparison of reform period macroeconomic policy choices and outcomes, in China and India. One decade lagged Indian reform in the context of similar economic and very different political structures offers a powerful natural experiment. Chinese low but positive real interest rates, facilitated by greater exchange rate volatility, and high infrastructure investment allowed it to outperform India in its first post reform decade. We find political structure did lead to specific inefficiencies in macroeconomic outcomes but macro-institutional changes exist that can improve policy. More openness under similar labor endowments give both countries the opportunity to commit to more effective, stable yet stimulatory, macroeconomic institutions and policies.

https://papers.ssrn.com/sol3/Delivery.cfm?delivery_id=509323

A. K. Jha

Papers

Dictatorship, Democracy and Institutions: Macropolicy in China and India