ECONOMICA

While the popularity of cryptocurrency is on the rise as a medium of exchange and investment, there are worries about the volatility of private digital currencies available on the internet and how they might affect the currencies of countries in the long run. As a result, the concept of central bank digital currency (CBDC) is garnering interest among institutions and governments alike. Several initiatives are being undertaken in countries such as the US (Digital Dollar), China (Digital Yuan), Sweden, New Zealand, etc. With the RBI also set towards launching a CBDC, let us take a look at what a CBDC is and what its implications will be in the economy. What are CBDCs? Also known as digital base money or digital fiat currency, a central bank digital currency (CBDC) is the digital form of legal tender issued by the central bank of a country. It is similar to a fiat currency and is exchangeable one-to-one with the fiat currency. Only its form is different. It is backed by the credit of issu...

  The evidence that doesn’t uphold the conventional economic thinking attached to the law of supply & demand.

C urrently, there is a huge debate about whether the Covid-19 induced economic crisis has pushed the major economies to stagflation. The debate is getting stronger in India, with the release of GDP data for the first quarter of FY21. But what exactly is stagflation? What are the main causes and why is it so dangerous? What is stagflation? Stagflation was first recognized during the 1970s when many developed economies experienced rapid inflation and high unemployment as a result of an oil shock. Stagflation is a period of rising inflation along with falling output and rising unemployment. As a result, real incomes fall as wages struggle to keep up with rising prices. It can also be defined as a period of inflation in addition to a decline in the gross domestic product (GDP).  The term stagflation , a portmanteau of stagnation and inflation , was first used during a period of inflation and unemployment in the United Kingdom in the 1960s and 1970s. UK policymakers failed to recognis...

Economic crisis is a phase in an economic cycle in which an economy faces travails and difficulties for a long time. It could be a sharp drop in the economic state of the country, manifested in a significant fall off in production; a violation of existing production relations; bankruptcy of enterprises; and/or rising unemployment and inflation. The result of this could be a decline in the living standards of the population and a sharp decrease in the real gross national product. Concept of economic crisis first set foot in the social sciences literature in 1960’s, defined as ‘ a period of difficulty, dismay or an emergency in the life of a country, a society or a corporation, or in relations of several countries. ’ Here’s an insight into the economic crisis faced by some nations: Zimbabwe The most neoteric example of hyperinflation, wherein prices change so hastily that every day the prices rise exponentially and money keeps on depreciating, virtually overnight or even in the ...

  Born – 23 rd August 1915 Affiliation – London School of Economics, University of Manchester, Princeton University. Nobel prize – Prize in Economic Sciences (1979) Contributions – Lewis Model, or dual sector model in underdeveloped and developing economies. “I never meant to be an economist. My father wanted me to be a lawyer but he died when I was seven; he had no vote at the appropriate time. I did not want to be a doctor either, nor a teacher. That put me in a hole, since law, medicine, preaching and teaching were the only professions open to blacks in my day. I wanted to be an engineer, but neither the colonial government nor the sugar plantations would hire a black engineer.” -         Arthur Lewis Sir Arthur Lewis, a pioneer of development economics and one of the influential Nobel laureates, also known as the father of development economics was born on January 23 rd 1915 to George and Ida Lewis who were both school teache...

Dr. Raja Chelliah             As India celebrates the 25th anniversary of economic reforms this year, much has been spoken and written about the reforms. In 1991, when the country faced a precarious situation, structural reforms were undertaken to change the course of India’s economy, of which tax reforms were an important part. Integral to these taxation reforms was the Padma Vibhushan recipient Dr. Raja Chelliah, famously known as the “father of India’s tax reforms”. EDUCATION - Born on 12 December 1922, Dr. Raja Jesudoss Chelliah graduated with a master's degree in Economics from the University of Madras. He then worked as a lecturer in Madras Christian College for five years before going to the United States on a Fulbright scholarship to do a PhD at the University of Pittsburgh. BEGINNING OF A STELLAR CAREER IN PUBLIC FINANCE - After graduating from the University of Pittsburgh, Dr. Chelliah took a job in the National Council of Applied Eco...