Web Sify
Follow us on
Mail
Print

Letters: In search of new theories

Source : BUSINESS_STANDARD
Last Updated: Thu, Feb 14, 2013 22:11 hrs

This refers to Madan Sabnavis’ article “When all theories collapse” (February 11). If economic theories are found wanting in bailing out the world’s downhill economies, it is because 21st-century economists have to grapple with a complicated world economy. They have to contend with numerous variables and constraints that cannot be encapsulated in an integrated model. Economies the world over are more interdependent than ever, and yet very competitive. They are interactive and open through widespread communication systems, and yet cautious about sharing information. The task of balancing growth and inflation is strewn with conflicting mediators, such as the fiscal deficit, current account deficit, liquidity trap, investment and consumption, exports and imports, exchange rates and so on. So far it has proved to be the search for the Holy Grail.

In particular, no economic theory can explain, or resolve, the self-destructive mixture of electoral politics and good economics that has distinguished India. It boasts of a unique model of “entitlement economics” (subsidies, the Mahatma Gandhi National Rural Employment Guarantee Act, etc), which has been pioneered by the National Advisory Council and is being implemented by an eminent economist prime minister.

 

Y G Chouksey, Pune

 

Letters can be mailed, faxed or e-mailed to:

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg

New Delhi 110 002

Fax: (011) 23720201·

E-mail: letters@bsmail.in

All letters must have a postal address and telephone number




More from Sify:
blog comments powered by Disqus
most popular on facebook
talking point on sify finance