Showing posts from December, 2014

Peak Trade and Make in India

For the past few decades, upto the financial crisis, international trade grew at a rate of around 7% a year, which was almost double the rate of growth of world GDP. Post financial crisis, the trade growth was sluggish, and for the last couple of years it has grown at around 3 percent, lesser than the pace of world GDP growth. In terms of trade to GDP share too, the world trade rose from around 40% of world GDP in the early 90s to peak at around 61% in 2011. It has now fallen to around 60%. This had lead to the theory that the world trade has peaked. Paul Krugman doesn't agree. He says that trade outgrowing GDP is not a natural law and we should neither be amazed nor disturbed if it stops happening. Some other economists chime in saying that it might just be a cyclical phenomenon and not a structural shift. However, there is good amount of evidence that the international trade growth, as we know it, has indeed peaked. And the reasons are structural and not just cyclical. That&#

Professional Integrity in public positions

Jonathan Burrows was a managing director at Blackrock, a giant asset management firm. Though he earned a million pounds salary, he avoided paying around 14 pounds of rail fare for daily commute in London, and instead chose to dodge ticket barriers. His total fare avoidance added to around 43000 pounds over five years. He was caught one day. He not only lost his employment, but was also banned from the financial industry altogether by the regulator in UK, viz. the Financial Conduct Authority. You can read details on the specific event  here .  There was no direct link between how Jonathan behaved in the office (his record in office was impeccably clean), to his fare avoidance behaviour outside it. However, Jonathan committed the dodge knowing well that it was unlawful to do so. And that is what the FCA was not happy about. In a terse statement FCA said, "Jonathan's actions fell short of standards we expect in the financial industry." Jonathan handled public investmen