- L3/P1: Balance of Payment (BoP) & Current Account Deficit
- L3/P2: Rupee Devaluation & Exchange rate regimes
- L3/P3: Capital account Convertibility & Tarapore Committee
- L3/P4: ECB quantitative easing & Greece Anti-Austerity
- Sixth lecture was done on 20th February 2015, and uploaded on youtube. Total ~2:30 hours but I’ve split it into four parts.
- PowerPoint of the lecture, available at Mrunal.org/Download
- Medium of instruction- Hindi.
- English version not possible for the moment, because I’m required to teach at this batch, in Hindi/Gujarati only. Besides, same content is available in English-text articles and English PPTs on the site.
L3/P1: Balance of Payment (BoP) & Current Account Deficit
- Brief recap of the previous lectures
- What is balance of payment (BoP)? Definition, methodology.
- How is World’s balance of payment zero?
- How is India’s balance of payment zero? And if so, why did we have a balance of payment crisis in 1991?
- Two components of BoP: current account and capital account
- Components current account balance: visible and invisible part.
- Current Account: Services, income, transfer, gifts donations and remittances
- Concepts: Balance of trade, trade deficit and trade surplus. Major imports and exports of India.
- Calculating current account deficit and current account surplus.
- Difference between FDI and FII
- What is forex reserves? How is it built? What are the components of forex reserves?
L3/P2: Rupee Devaluation & Exchange rate regimes
- if $1=50 or $1=60: who decides this exchange rate and how?
- Fixed exchange rate regime: mechanism and limitations.
- Floating exchange rate regime: mechanism limitations.
- Difference between devaluation and depreciation of Rupee
- Difference between revaluation and appreciation of rupee?
- Historic trend of Indian rupee’s fall/weakening against US dollar
- How does devaluation of the currency boost its exports?
- Difference between NEER and REER? How does it help determining whether currency is undervalued or overvalued?
- “Managed” floating extended rate regime.
L3/P3: capital account convertibility
- What is “convertibility”? Why do we need to impose quantitative restrictions on convertibility between Indian rupee and foreign currency?
- What is “full” current account convertibility?
- What is capital account convertibility? Why does India have “partial” capital account convertibility?
- Under FEMA, What are the quantitative restrictions put on current account and capital account convertibility?
- What is capital account liberalization?
- Features of Liberalized remittance scheme (2004)?
- Arguments in favour and against of capital account convertibility and capital account liberalization.
- How did full capital account convertibility lead to collapse of East Asian economies in 1997?
- Recommendations of S.S.Tarapore Committee and why time not yet ripe for implementation of full capital account convertibility in India.
L3/P4: ECB quantitative easing & Greece Anti-Austerity
- Why does European Central bank (ECB) want to begin quantitative easing or Eurozone bond purchase program from March 2015?
- Mechanism of ECB-QE.
- Arguments in favour and against quantitative easing by ECB.
- How does it affect India’s economic interests?
- What is the Greece sovereign debt crisis?
- Why has ECB refused to incorporate Greece Bond purchase in its QE program?
- Why do Greek Leftist party “Syriza” and its leader Alexis Tsipras are pursuing “Anti-austerity” campaign?
- Possible implications if Greece leaves Eurozone?