IDEAS home Printed from https://ideas.repec.org/p/lev/wrkpap/wp_820.html
   My bibliography  Save this paper

Minsky, Monetary Policy, and Mint Street: Challenges for the Art of Monetary Policymaking in Emerging Economies

Author

Listed:
  • Srinivas Yanamandra

Abstract

This paper examines the emerging challenges to the art of monetary policymaking using the case study of the Reserve Bank of India (RBI) in light of developments in the Indian economy during the last decade (2003-04 to 2013-14). The paper uses Hyman P. Minsky's financial instability hypothesis as the conceptual framework for evaluating the endogenous nature of financial instability and its potential impact on monetary policymaking, and addresses the need to pursue regulatory policy as a tool that is complementary to monetary policy in light of the agenda of reforms put forward by Minsky. It further reviews the extensions to the Minskyan hypothesis in the areas of setting fiscal policy, managing cross-border capital flows, and developing financial institutional infrastructure. The lessons learned from the interplay of policy choices in these areas and their impact on monetary policymaking at the RBI are presented.

Suggested Citation

  • Srinivas Yanamandra, 2014. "Minsky, Monetary Policy, and Mint Street: Challenges for the Art of Monetary Policymaking in Emerging Economies," Economics Working Paper Archive wp_820, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_820
    as

    Download full text from publisher

    File URL: http://www.levyinstitute.org/pubs/wp_820.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kaminsky, Graciela L. & Reinhart, Carmen M., 2000. "On crises, contagion, and confusion," Journal of International Economics, Elsevier, vol. 51(1), pages 145-168, June.
    2. Aizenman, Joshua, 2010. "The Impossible Trinity (aka The Policy Trilemma)," Santa Cruz Department of Economics, Working Paper Series qt9k29n6qn, Department of Economics, UC Santa Cruz.
    3. Bezemer, D.J., 2009. "No one saw this coming. Understanding financial crisis through accounting models," Research Report 09002, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    4. Maurice Obstfeld & Jay C. Shambaugh & Alan M. Taylor, 2010. "Financial Stability, the Trilemma, and International Reserves," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 57-94, April.
    5. Eric Tymoigne, 2009. "Minskyan Perspective, Part II--Treasury, CRMPG Reports, Financial Stability Forum," Economics Working Paper Archive wp_574_2, Levy Economics Institute.
    6. Joshua Aizenman & Menzie D. Chinn & Hiro Ito, 2008. "Assessing the Emerging Global Financial Architecture: Measuring the Trilemma's Configurations over Time," NBER Working Papers 14533, National Bureau of Economic Research, Inc.
    7. M. Ayhan Kose & Christopher Otrok & Eswar Prasad, 2012. "Global Business Cycles: Convergence Or Decoupling?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 511-538, May.
    8. Bezemer, Dirk J, 2009. "“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models," MPRA Paper 15892, University Library of Munich, Germany.
    9. Gauti B. Eggertsson & Paul Krugman, 2012. "Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1469-1513.
    10. repec:dgr:rugsom:09002 is not listed on IDEAS
    11. Charles P. Kindleberger & Robert Z. Aliber, 2005. "Manias, Panics and Crashes," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-62804-5, December.
    12. Eric Tymoigne, 2009. " A Critical Assessment of Seven Reports on Financial Reform: A Minskyan Perspective, Part III--G30, OECD, GAO, ICMBS Reports," Economics Working Paper Archive wp_574_3, Levy Economics Institute.
    13. Raghuram G. Rajan, 2010. "Fault Lines: How Hidden Fractures Still Threaten the World Economy," Economics Books, Princeton University Press, edition 1, number 9111.
    14. Jan Kregel, 2007. "The Natural Instability of Financial Markets," Economics Working Paper Archive wp_523, Levy Economics Institute.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carlos Parodi Trece, 2011. "Las crisis financieras: un marco conceptual," Chapters of Books, in: Carlos Parodi Trece (ed.), La primera crisis financiera internacional del siglo XXI, edition 1, volume 1, chapter 1, pages 15-76, Fondo Editorial, Universidad del Pacífico.
    2. Orcan ÇÖRTÜK & Nirvikar SINGH, 2013. "Turkey’ Trilemma Trade-offs: Is there a role for reserves?," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 28(328), pages 67-88.
    3. Viet‐Ngu Hoang & Duc Khuong Nguyen & Tuan Pham, 2021. "On the effects of monetary policy in Vietnam: Evidence from a Trilemma analysis," The World Economy, Wiley Blackwell, vol. 44(5), pages 1428-1447, May.
    4. Thomas Goda, 2013. "The role of income inequality in crisis theories and in the subprime crisis," Working Papers PKWP1305, Post Keynesian Economics Society (PKES).
    5. Eugenio Caverzasi & Alberto Russo, 2018. "Toward a new microfounded macroeconomics in the wake of the crisis," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(6), pages 999-1014.
    6. Beachy, Ben, 2012. "A Financial Crisis Manual Causes, Consequences, and Lessons of the Financial Crisis," Working Papers 179105, Tufts University, Global Development and Environment Institute.
    7. Layal Mansour, 2014. "The Power of International Reserves: the impossible trinity becomes possible," Working Papers halshs-01054614, HAL.
    8. Piersanti, Giovanni, 2012. "The Macroeconomic Theory of Exchange Rate Crises," OUP Catalogue, Oxford University Press, number 9780199653126.
    9. Cortuk, Orcan & Singh, Nirvikar, 2011. "Turkey's trilemma trade-offs," MPRA Paper 35623, University Library of Munich, Germany.
    10. Frankel, Jeffrey, 2010. "Monetary Policy in Emerging Markets," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 25, pages 1439-1520, Elsevier.
    11. Steiner, Andreas, 2013. "The accumulation of foreign exchange by central banks: Fear of capital mobility?," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 409-427.
    12. Rachel Male, 2010. "Developing Country Business Cycles: Characterising the Cycle," Working Papers 663, Queen Mary University of London, School of Economics and Finance.
    13. Julia, Knolle, 2014. "An Empirical Comparison of Interest and Growth Rates," MPRA Paper 59520, University Library of Munich, Germany.
    14. Joshua Aizenman & Brian Pinto, 2013. "Managing Financial Integration and Capital Mobility—Policy Lessons from the Past Two Decades," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 636-653, September.
    15. Alberto Russo & Luca Riccetti & Mauro Gallegati, 2016. "Increasing inequality, consumer credit and financial fragility in an agent based macroeconomic model," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 25-47, March.
    16. Ursel Baumann, 2014. "Has US Household Deleveraging Ended? A Model-Based Estimate of Equilibrium Debt," Working Papers w201404, Banco de Portugal, Economics and Research Department.
    17. William Kingston, 2014. "Schumpeter and the end of Western Capitalism," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 449-477, July.
    18. Buiter, Willem, 2014. "Central Banks: Powerful, Political and Unaccountable?," CEPR Discussion Papers 10223, C.E.P.R. Discussion Papers.
    19. Salvatore Dell’Erba & Emanuele Baldacci & Tigran Poghosyan, 2013. "Spatial spillovers in emerging market spreads," Empirical Economics, Springer, vol. 45(2), pages 735-756, October.
    20. Beutel, Johannes & List, Sophia & von Schweinitz, Gregor, 2018. "An evaluation of early warning models for systemic banking crises: Does machine learning improve predictions?," Discussion Papers 48/2018, Deutsche Bundesbank.

    More about this item

    Keywords

    Financial Crisis; Central Bank; Monetary Policy; Bank Regulation; Fiscal Policy; Exchange Rate Policy; Financial Institution Infrastructure;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_820. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Elizabeth Dunn (email available below). General contact details of provider: http://www.levyinstitute.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.