Many people think that a firm gets exposed to currency risk owing to imports, exports and foreign borrowing. This is an incomplete picture. Suppose a firm switches from importing steel to buying imported steel from a domestic dealer.
A big CAD is a bad thing — much like a big fiscal deficit.
A country is always better off with a small or zero CAD or ideally
a surplus. The CAD is a drag on growth.
The large CAD is a profound drag on India’s outlook.
If we managed to reduce the CAD, things would get better.
by Ajay Shah, ajay shah blog The Problem While there are thousands of listed companies in India, for all practical purposes, stock market liquidity is the exclusive preserve of large companies. For small securities, the conventional continuous market presents daunting problems of liquidity. In conventional continuous trading, the price is made by the orders that …
Ajay Shah writes on India’s inflation crisis and how this affects the country’s monetary policy.
by Dani Rodrik, Project Syndicate, and Ajay Shah Editor’s note: There has been further discussion of the Rodrik assertion that there will be no more manufacturing led growth miracles by a number of economists at the Economist.