The Hindu Business Line : How Keynes' ideas got abused

Macro theory that has been the most useful to our policymakers is Keynesian economics, says Soumyen Sikdar in Principles of Macroeconomics, from Oxford (www.oup.com). "Indian economists have productively borrowed from other schools to supplement their own ideas in their analysis of important phenomena when the traditional Keynesian approach failed to provide good insights," he adds. "For example, the Reserve Bank of India has successfully used elements of the monetarist approach to keep inflation well under control over the past half a century."

The author points out that Keynes did not foresee the possibility that politicians might abuse his ideas. "In particular, his advocacy of budgetary deficit to fight unemployment and depression freed governments from the obligation to balance the budget. In the hands of irresponsible and corrupt public administration this inevitably led to fiscal profligacy and unsustainable increases in government debt over the years." Remedy has come from following new classical economics that lays emphasis on `the solvency of government operations and fiscal consolidation'.

Essential education.

Concepts clarified

More than a hundred topics are covered in ABC of Finance & Management Studies, by G. Jawahar Babu (Babujawa@rediffmail.com). The quick and handy reference begins with accounting concepts, deals with finance and management techniques, touches upon securities and systems, before wrapping with a listing of important web sites in accounting and finance.

Useful to browse through.

Split-second decisions

When a consumer considers purchasing a product, many questions pop up in his mind: Is the product really needed? Can it be purchased elsewhere or later on for less money? How will the product fit the image or lifestyle? Processing all these posers takes no more than a quarter of a second in most cases, says Marshal Cohen in Why Customers Do What They Do, from Tata McGraw-Hill (www.tatamcgrawhill.com). "In that fraction of a second, consumers decide if they will read the package, compare it to other similar products, and determine if this is the product for them." Check if your product conveys its message within that short span.

Help for mind reading.

Tailpiece

"We included a new player in the football team."

"Who?"

"The one who used to see the cricket ball as a football!"

http://BookPeek.blogspot.com

D. Murali