22.28 ndian onom
rising. Such an effect on market is popular in India
isocost curve as the ‘Khilji Effect’.
A curve on the graph showing the varying India saw these time-tested lessons followed
combinations of factors of production (i.e., labour, by the GoI in 2014–15—Central Ministers
capital etc.) that can be used to produce a given publicly stated that matters are under control
quantity of a product with a given technology. with sufficient quantity of ‘onions’ and ‘potatoes’.
The Government brought these two commodities
J-curve effect under the purview of the Essential Commodities
Act, too. This did show the ‘strong intent’ of the
The tendency for a country’s balance of payments government to control prices.
deficit to initially deteriorate following a Though, the routine statements claiming
devaluation of its currency before moving into that ‘prices will rise’ often started the inflationary
surplus. spiral (it was repeatedly done by the then Union
Minister of Agriculture).
An individual active on the floors of the stock kleptocrAcy
exchanges who buys or sells stocks on his own A government which is corrupt and thieving—
account. A jobber’s profit is known as jobber’s the politicians and bureaucrats in charge
spread. They are also known as Taravniwalla on using the powers of the state to earn personal
the Bombay Stock Exchange (BSE). benefits/profits. Russia after the disintegration is
condsiered to be a clear-cut example when Mafia-
Junk bonD friendly government allotted valuable shares of the
government companies when they were privatised.
An informal term denoting the financial
securities issued by a company/bidder as a means konDrAtieff wAve
of borrowing to finance a takeover bid. Such
securities generally include high-risk, high-interst A business cycle of 50 years, named after the
loans, that is why the term ‘junk’ is used. It is also Russian economist Nikolai Kondratieff (wrote
known as mezzanine debt. so in his book The Long Waves in Economic Life,
kerb DeAlings He argued that capitalism was a stable
system (the business cycle of 50 years implied
All the transactions taking place outside the stock it), in contrast to the Marxist view that it was
exchanges. self-destructive and unstable—he died in one of
The rulers of the Delhi sultanate didn’t understand
formal macroeconomics. But they knew one The abbreviated form of the Liquidity Adjustment
lesson very clearly—it was important to “signal Facility, is part of a financial policy provided
the government’s intent to keep expectations to the banks by the RBI in India. The facility
in check”. Alauddin Khilji personally inspected commenced in June 2000 under which the banks
markets and it worked—checking prices from operating in India are allowed to park their funds