Financial Crisis- Some Old Questions and Maybe Some New Answers
Dr.DuvvuriSubbarao, Governor, Reserve Bank of India delivered C.D. Deshmukh Memorial Lecture at Council for Social Development, Hyderabad on August 5,2010.
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He raised five question and shown that how crisis has possibly thrown new answers.
Q. 1. Have emerging market economies (EMEs) decoupled from the advanced economies?
- Pre-Crisis-An Increasingly Assertive ‘YES’
- Post Crisis- Quite Nuanced
Q.2.Should central banks persist with pure inflation targeting?
· Pre-crisis- An Increasingly Confident ‘YES’
· Post-Crisis- An Increasingly Qualified ‘YES’.
Q.3.Should financial stability be an explicit mandate of central banks?
· Pre-Crisis- No Answer
· Post Crisis- Mostly ‘YES’
Q.4.Are controls an appropriate mechanism for managing the capital account?
· Pre-Crisis-Largely ‘NO’
· Post Crisis- Qualified ‘YES’
Q.5.Has fiscal dominance of monetary policy ended?
· Pre crisis-‘Hopefully’
· Post Crisis-‘Hopefully’.
If you find these answers interesting then read in details @ http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=515
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