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
                                                            Stalin’s prisons.
        khilJi effect
     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