ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Surobhi MukherjeeSubscribe to Surobhi Mukherjee

Unconventional Monetary Policy in Japan and the United State

When most of the advanced countries are on the recourse to exit the path of unconventional monetary policy, it is time to look at a new perspective and review the unconventional monetary policy from the lens of tool purchase by central banks under quantitative easing. The purchase of government treasuries affects risk premia and yields more compared to the purchase of private assets by central banks. But the purchase of private exchange traded funds/mortgage backed securities are important for cash-starved entrepreneurs and real-estate developers compared to government bond purchase. How India was different in practising the unconventional monetary policy is also discussed.

Futures Markets

The National Agricultural Policy announced in 2000 recognised “the role of the futures markets as one that would contribute to price discovery and would help in risk management by reducing volatility in the prices.” The rationale for futures markets is that they reduce uncertainty, but with the online trading system replacing the open outcry method, there has been a large flow of investment capital. On the one hand, liquidity is required for efficient functioning of the market and on the other, it may lead to excessive speculation, therefore defeating the objectives of price discovery and reduction in uncertainty. The analysis of futures markets begs the question with respect to agricultural commodity markets: are prices determined by real supply and demand or are they affected by financialisation and presence of speculators?

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