economics

discipline. With hindsight, our capital cycle approach has failed at times when we have underestimated the impact on industries of political and legal interference, disruptive technologies and globalisation.

The fact that a change in the relationship between savings and investment in one country must force an obverse change in the relationship between savings and investment in another country is a very important point.

The Shah threw himself into a modernization and Westernization of the country, the white revolution: He carried out land reform where land was redistributed to farmers, landlords were compensated for their land by shares of privatized state-owned factories, transport networks were expanded, dam and irrigation projects carried out, malaria

Moreover, as factories are forced to close and industries consolidate, the firms left standing are not necessarily the most efficient or most profitable. Rather, the survivors tend to be those with the best access to government subsidies and cheap financing.

In FY 2010-11 the share of consumer credit in total bank credit was only 19%. By FY2023-24 this increased to around 33%. Nearly half of this credit is unsecured or quasi-secured (secured against weak collateral), which makes it riskier. In the post-pandemic period, much of the growth in bank credit has in fact been driven by growth in consumer

I am here concerned with public works considered as a means of “providing employment” or of adding wealth to the community that it would not otherwise have had.

A budget deficit, in short, is inflationary only to the extent that it causes an increase in the money supply. And inflation can occur even with a budget surplus if there is an increase in the money supply notwithstanding.

Relatedly, when fiscal deficits as a share of GDP are rising during a period of falling unemployment over a sustained period of time, that is another sign of fiscal dominance. This type of breakdown in correlation has occurred rarely within the past 70 years: