ICRIER-KAS Seminar Series on Financial Sector

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Prof. T. N. Srinivasan, Samuel C. Park, Jr. Professor of Economics and Professor of International and Area Studies at Yale University and Yong Pung How Chair Professor at the LKY School for Public Policy at the National University of Singapore

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Prof. T. N. Srinivasan, Dr. Parthasarathi Shome, Director and Chief Executive ICRIER, Prof. B. L. Pandit, Reserve Bank of India Professor at ICRIER

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Prof. Pandit was asked to comment on Srinivasans presentation

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Participants of the seminar

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Various questions were raised during the following Q&A session

Since the onset of the financial crisis in mid 2008 the origins and contributory factors to the crisis, the short run policy responses to it and the needed institutional including regulatory reforms in the immediate and longer term future for reducing the likelihood of its recurrence have been debated. In particular the G-20 leaders in their summit declarations and decisions have expressed their perspectives of the issues and in particular stressed coordinated fiscal stimulus as a response.

Prof. Srinivasan has argued that an analytically coherent and empirically tested macroeconomic model incorporating finance and a financial sector with micro-behavioural foundations does not exist. Available macro models either have no formal financial sector or introduce finance variables in an ad hoc manner. He also discussed some issues of the precise definitions and contents of fiscal stimulus and the issues of its measurement.