Richard Cooper, Robert Mundell, and John Williamson made important contributions on a variety of topics in international economics throughout their careers, particularly in terms of how we think about currency arrangements. This column reviews the work of all three, tracing their ideas and drawing lessons for policymakers today.
Paul De Grauwe
The opening sentence of Robert Mundell’s 1963 paper “Capital mobility and stabilization policy under fixed and flexible exchange rates” — one of the two most influential in a series of pathbreaking papers he published in the late 1950s and early 1960s — is curious: “The world is still a closed economy, but its regions and countries are becoming increasingly open.”
“Still”? Was Mundell thinking of a future with interplanetary trade, so that eventually the world as a whole wouldn’t be a closed economy? OK, he probably wasn’t, but if he was, it would have been in character. Mundell, who passed away on 4 April, was an economist ahead of his time.
RBI may consider issuing bonds to help soak up foreign money into stocks
The RBI report recommended further strengthening foreign-exchange reserves, citing the swings in the rupee around the time of the global taper tantrum in 2013 (Photo: Mint)Premium
, Bloomberg Current laws forbid the RBI from selling its own paper, and budgetary constraints could prevent the government from issuing so-called market stabilization scheme, or MSS, bonds that authorities have used in the past
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The Reserve Bank of India may consider issuing its own bonds to help soak up a deluge of foreign money into stocks that threatens financial stability, according to a report published by its researchers.