The Macroeconomy & Policy Change
Given India's success in achieving macroeconomic stability during the last half century, it is ironic that the study of macroeconomics in India has lagged far behind that of microeconomics. For this reason alone, the recent volume Macroeconomics and Monetary Policy: Issues for a Reforming Economy, edited by M. S. Ahluwalia, Y. V. Reddy and S. S. Tarapore, honoring Chakravarti Rangarajan, the first academic economist to serve as the Governor of the Reserve Bank of India and a much-admired figure among Indian economists and policy makers, is a useful addition to literature on economic reforms in India. July 30, 2003 With the combined central and state fiscal deficits having hit the double-digit levels, the question whether another macroeconomic crisis is around the corner has assumed renewed salience. In an important paper in a recently published volume, Macroeconomics and Monetary Policy: Issues for a Reforming Economy, edited by Montek S Ahluwalia, Y V Reddy and S S Tarapore, Ahluwalia offers a careful dissection of this question. He concludes that though poor fiscal performance and incomplete reforms of the banking sector are sources…
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