Good articles...

While browsing through Ajay Shah's blog, found couple of articles are good, so thought of sharing with you guys...

Mr. Deepak Lal's article in Business Standard regarding "Capital Controls" is very good reading material on interlinked macro economics. One piece of the article is as following...

"The current account deficit is by definition the difference between a country’s savings and investments, matched as a matter of accounting by equivalent net inflows or outflows on the capital account of the balance of payments. Current account deficit worries are, therefore, about the size of the capital inflows, which, Ceteris Paribus, will supplement domestic investment and raise it above what could be financed by domestic savings. This should raise growth rates, if the investment is productively employed. It clearly was not the case in the US, where the inflows primarily went to finance the politically-determined entitlements in the sub-prime housing market to Ninjas (borrowers with no income, no job and no assets). But, in India, which has vast infrastructure investment needs, capital inflows would be productive and the size of the corresponding current account deficit should not be a matter of concern to policy makers."

Ila Patnaik's article in Indian Express on GDP growth and Inflation. Will be a good reading on presently going on hot topic of Indian Economy Overheating. For more posts on Indian economy overheating, click here: 1, 2 and 3.