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Articles by Michael Debabrata PatraSubscribe to Michael Debabrata Patra

Priming Monetary Policy for the Pandemic

Vol. 57, Issue No. 20, 14 May, 2022
Michael Debabrata Patra, Indranil Bhattacharyya

In response to a once-in-a-century pandemic in which a health crisis rapidly mutated into a macroeconomic and financial shock, the Reserve Bank of India mounted an unprecedented policy response. While the entire response involved an intertwining of monetary, regulatory, and technological measures, this paper focuses on monetary policy initiatives. Distinguishing between conventional and unconventional policy measures, the paper makes an impact assessment in terms of key macroeconomic and financial variables. The lessons drawn from this unique experience are evaluated, with emphasis on framework flexibility, the critical role of communication in anchoring expectations under extreme uncertainty, and the approach of strategic restraint in the face of a normalisation/ tightening bandwagon across advanced and emerging countries. The paper concludes by peering into the near future in which India prepares to manage the spillovers from divergent monetary policies across the world and geopolitical tensions.

Can the SDR become a Global Reserve Currency?

Vol. 47, Issue No. 11, 17 Mar, 2012
C Rangarajan, Michael Debabrata Patra

Global economic prospects are worsening rapidly. This has revived the debate on the evolving international monetary system and the international reserve currency that will underpin it. Since the 1940s, the US dollar remains the world's dominant reserve currency. Developments since 2008 have challenged the pre-eminence of the US dollar. The euro appeared to have provided an alternative during 2000-08, but has come under fire since early 2010. Prospects for internationalisation of emerging economy currencies are still limited. The global crisis of 2008-09 has resurrected interest in the special drawing right as an international reserve currency. In this paper, we argue that the SDR fails to meet the main attributes of an international reserve currency - deep and liquid markets, supported by currency convertibility; wide use internationally; macroeconomic and political stability in the issuing country. At this juncture, the critical mass of political will to invest the International Monetary Fund with these responsibilities simply does not exist and/or will take a long time to form. Despite shocks and sometimes acute differences in views on the US dollar, the current system has been resilient over decades, and is likely to remain so for some more years.

IMF Reforms 2010: Do They Mirror Global Economic Realities?

Vol. 46, Issue No. 30, 23 Jul, 2011
Arvind Virmani, Michael Debabrata Patra

The 2010 round of quota reforms at the International Monetary Fund did not adequately reflect the emerging global economic realities and this must be regarded as a missed opportunity to redress the gross imbalance that has prevailed for several decades. Several "positive" aspects of the reforms have been given high publicity, but they need to be assessed analytically. This paper addresses issues of governance reform at the IMF in the context of the emerging macroeconomic configurations.

Should Financial Stability Be Assigned to Public Policy?

Vol. 38, Issue No. 23, 07 Jun, 2003
Michael Debabrata Patra

In the light of the experience with the severe financial crises of the 1990s, the responsibility for financial stability has implicitly been assigned to public policy, overturning, in a sense, the dominant paradigm until then of regarding financial development, including stability, as a function best performed by the financial markets. This paper undertakes a critical examination of this assignment, its magnitude and quality, by questioning its analytical underpinnings. The paper examines the search for the appropriate international financial architecture as the virtuous approach to the assignment and concludes that the identification of international standards and codes for adoption by countries may be a suboptimal approach. On the other hand, establishment of an international bankruptcy mechanism holds promise of filling a major gap in the efforts to strengthen the international financial architecture.

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