For about a week after the Dubai crisis broke, international financial markets chose to ignore it. Stock-markets climbed, commodity prices rose and the dollar continued to be beaten down. It is not too difficult to explain this initial indifference. For one, the magnitude of the Dubai crisis appeared piffling, at first glance, compared to the “subprime” crisis or the meltdown following “Lehman’s bust”. When global banks had run up losses...

Paul A. Samuelson, the first American Nobel laureate in economics and the foremost academic economist of the 20th century, died Sunday at his home in Belmont, Mass. He was 94. His death was announced by the Massachusetts Institute of Technology, which Samuelson helped build into one of the world’s great centres of graduate education in economics. In receiving the Nobel Prize in 1970, Samuelson was credited with transforming his discipline from...

Governments and people have to make choices about accepting new scientific developments into their daily lives. Many attribute high levels of objectivity and integrity to scientists, which is not true of many of them. Scientists have been known to manipulate results to their advantage. Scientific issues are often complex, there are differing views among scientists and the layman finds it difficult to decide which scientific course is harmful or beneficial....

The RBI has reason to be concerned. Banks’ exposure to mutual funds (MFs) has more than trebled, from Rs 45,000 crore to Rs 1,64,000 crore, during March-November 2009. The RBI is worried that stock market volatility could impact banks and, hence, endanger financial stability. Hence, the overall cap on stock market exposure as part of macro-prudential regulation. Currently, the aggregate exposure of a bank to the capital markets in all...

There is much about Dubai that is artificial and based on illusion: the man-made islands designed to represent a map of the globe; the indoor ski slope in the midst of desert; the incredible hotel with glass walls looking onto a sea aquarium mimicking the surrounding ocean. Dubai had also become synonymous with excess: building the tallest tower in the world and the biggest and most expensive luxury hotels, residences,...