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BSE and Nasdaq

The synchronised movement of BSE and Nasdaq has often been interpreted as an indication of integration catching up with the Indian financial markets. The authors have looked into the nature of relationship between the daily share price in BSE and NSE on the one hand and Nasdaq and New York Stock Exchange on the other, for 1999-2000 through 2000-2001 and have found a unidirectional causality from Nasdaq to BSE or NSE. The relationship as well as direction of causation also holds good for the technology segment of the New York Stock Exchange and BSE or NSE. However, domestic prices of technology stocks and overall domestic share prices were found to be independent of each other.

New Monetary Transmission Channels-Role of Interest Rates and Exchange Rate in Conduct of Indian Monetary Policy

Role of Interest Rates and Exchange Rate in Conduct of Indian Monetary Policy Partha Ray Himanshu Joshi Mridul Saggar This paper explores new dimensions in the monetary transmission mechanism in the environment of liberalisation initiated in the early 1990s and in the context of growing integration of financial markets. An examination of the Chakravarty Committee paradigm in this changed milieu motivated us to see the role of two key variables in the conduct of monetary policy, viz, interest rates and exchange rates. The long-run relationship between money, prices, output, and exchange rate is examined and the impact of money market disequilibrium on interest rate is traced by testing the joint significance of the lags of disequilibrium errors. We also conduct weak and block exogenity tests for exchange rates. Interest rates and exchange rates are seen to be endogenously determined in the liberalised regime beginning 1992-93, raising the possibility of the change in transmission mechanism following the advent of financial reforms. The recent shifts in the operating procedure of monetary policy are in consonance with our findings.

Durability and Time-Frame of Industrial Retrogression

A comment on some of the terms Sarkar has used. Even as she is critical of the use of the term 'anti-social', she inadvertently ends up using the same term while mentioning the bandhs in Calcutta. Also, talk of 'Left Calcutta', 'party mouthpiece', etc, remind one of the days of the cold war. Cannot we, at least, avoid this?

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