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The article reports on the stock market performance of India. It mentions that country's Nifty so and Sensex indices reached record highs at the end of November, and as to many fund managers desperate for diversification, India looks the most promising alternative. It also mentions that the central bank has been forced to raise interest rates in defence of the rupee impacting its domestic monetary policy.

The author speculates about whether paper money, no longer backed by gold, could lose its value if the world's major economies continue to run up debt. Given the dollar's role as a currency of last resort, some wonder if its decline heralds not just an economic adjustment by the United States, but a crisis of sorts in the value of paper money itself. Money in its present form is a relatively new invention. For most of human history money meant either gold or silver, either directly, or indirectly by means of the "gold standard" which meant, at least in theory, that all paper money was backed by gold. But it came to an end in 1971, when inflationary pressures in America caused the country's manufacturers to become uncompetitive and forced the country off the gold standard. Since then the world has relied on "fiat money", so-called because it is created by government fiat and is backed only by the promises of central bankers to protect the value of their currencies. It is the value of those promises that some are now questioning. Although central banks around the world still hold about 30,000 tonnes of gold in their reserves, many have been offloading their stocks over the years. Those who doubt the continued worth of paper money as a store of value point to two things. The first is that the price of gold has been rising even though official inflation is low. But the rise in the price of gold in particular has raised questions. The biggest of these--and the second main reason for concern--is the amount of debt that rich-country governments have been running up.

The article focuses on planning of government of Japan to propose successor to Kuroda Haruhiko as Bank of Japan's head. Topics discussed include planning of central banks to tighten monetary policy since 2007, cap defended by the Bank of Japan by bonds of the gross domestic product (GDP) of Japan, and paper losses caused by rise in bond yields.

The article discusses India's monetary reforms and their impact on the country's economy and institutions. Topics discussed include Prime Minister Narendra Modi's withdrawal of several rupee notes from the market, the objective of Modi's demonetisation policy, the option for the Reserve Bank of India to create new currency liabilities.

The article reports on rise in inflation in Europe. It mentions that paper by Veronica Guerrieri of the University of Chicago and colleagues argues that monetary policy should tolerate somewhat higher inflation if doing so allows workers to find a new job during periods of economic change. It also mentions that inflation gets baked into economies when workers and firms come to believe that prices will keep rising.

The article comments on the rising popularity of plastic payment in several forms. In the past few months, central bankers and currency traders have spent many hours contemplating the resilience of the dollar. To technologists at the American Treasury Department's Bureau of Engraving and Printing, this has a more literal meaning. They are testing--as they have been, off and on, for the better part of a decade--various plastic (technically, "polymer") banknotes, comparing their qualities with those of America's traditional paper money. Several countries have already switched from paper to plastic, at least in part. Last week, having had plastic 20-peso notes since 2002, Mexico decided to issue its 50-peso note in plastic too. In all, 23 countries, including Kuwait, Indonesia, Chile and Zambia, have issued plastic notes. Pioneered by Australia in 1988, polymer notes have several advantages over paper ones. They are harder to counterfeit. The Mexican notes, for instance, have a clear security window that is difficult to forge. Plastic notes are also less prone to tearing, lasting four times as long as the average paper bill, and carry fewer germs, because paper absorbs sweat and moisture more easily. However, the European Central Bank stuck to paper when issuing euro notes for the first time in 2002. America has no plans to change yet. Changing infrastructure to manufacture and to process plastic money would be pricey. And Americans might find plastic money too cheap-looking and strange. America may not be adopting plastic cash, but it is using plastic means of payment more than ever. In December, the Federal Reserve said that electronic payments--using debit and credit cards and so forth--have exceeded cheque payments for the first time.

The article discusses the efforts by various central banks to shift to electronic money and mobile payments from the use of paper money and their possible effects to the financial sector. Also cited are the proposed issuance of central-bank digital currency (CBDC) to allow central banks to retain control of their monetary systems, China's digital yuan, and Sweden's e-krona.

The article discusses economist and Harvard University faculty member Kenneth Rogoff's claim that if nations such as the U.S. and Great Britain scrapped their physical forms of currency it would help the governments collect additional taxes, fight crime, and develop more efficient monetary policies. Computer software company Apple Inc.'s "contactless payment" system is mentioned, along with cash and the amount of paper monetary notes and coins in circulation. The World Bank is examined.

This article examines how tools designed to make financial markets less volatile can have the opposite effect. Markets, even more than governments, have been bearing growing amounts of risk in recent years. At the same time, many markets, those for shares as well as for debt and commodities, have become more volatile across the world. Much effort has gone into trying to avoid the ill effects of that volatility. The most recent recession, for example, passed without any large-scale bank failures, in contrast to earlier downturns that typically brought banking crises and collapses of financial firms. Yet it would be premature to think that market risk has been conquered altogether. The wisdom of a quantitative approach appeared to be confirmed in 1973 when two professors working in America, Myron Scholes and Fischer Black, published a paper in the Journal of Political Economy which argued that the price of an option (a particular kind of financial instrument, of which more later) could be calculated almost perfectly using a mathematical equation. The formula was based on volatility. The technique that has become near-ubiquitous over the past decade is called value at risk (VAR).

Discusses the incoming flow of money in Brazil since big state companies were authorized to seek money abroad. How billions have been raised through commercial paper and Eurocurrency issues by companies like state telephone company Telebras, oil company Petrobras and mining company Companhia Vale do Rio Doce; Details on the opening of stock markets in Rio and Sao Paulo to foreigners for individual shares.

The article focuses on a working paper from the nonprofit National Bureau of Economic Research, "Do banks pass through credit expansions? The marginal profitability of consumer lending during the great recession." It states the paper examined evidence of demand for consumer credit and mentions theories on credit card balances of individuals with similar credit scores but differing spending limit thresholds. It talks about the reduced impact of U.S. Federal Reserve's efforts to increase lending.

The article discusses implications for U.S. monetary policy of the Federal Reserve's (Fed's) large holdings of securities it has acquired through quantitative easing. A paper by two former advisers to the Fed, Joseph Gagnon and Brian Sack, describes how the Fed can use that stockpile to its advantage.

The article focuses on how the decision to adhere to the gold standard or part from it affected trade policies, as examined in the July 2009 paper "The Slide to Protectionism in the Great Depression: Who Succumbed and Why?" by Barry Eichengreen of the University of California, Berkeley. The paper says that countries with currencies backed by gold were more protectionist than those who abandoned gold for their monetary systems.

There is concern that several years of low inflation have made central bankers complacent. Two days of heavy rain failed to dampen the spirits of most of the central bankers and economists who met last week in the Rocky mountain resort of Jackson Hole, Wyoming, for the annual symposium of the Federal Reserve Bank of Kansas City, one of the biggest jamborees on their calendar. Now that America's economy is picking up strongly, participants might be forgiven for feeling light-headed, especially at over 6,000 feet. Central bankers' success in reducing inflation over the past decade allows them to pat each other on the back. However, several of the papers presented at this year's symposium questioned whether monetary policy really has been that good -- or just lucky. A paper by James Stock of Harvard University and Mark Watson of Princeton University challenged the consensus view that the decline in America's economic volatility over the past two decades -- with longer expansions and shorter recessions -- was largely the happy result of better monetary policy. They concluded that improved monetary policy accounted for less than 10% of the reduction in volatility. Structural changes, such as better inventory control, the growing share of services in the economy and financial-market deregulation, have also helped to smooth the economy. But as much as half of the decline in volatility, the authors argued, was due to smaller economic shocks, such as changes in the price of oil, and so could prove temporary. If all this were not bad enough, another paper, by Claudio Borio and Bill White of the Bank for International Settlements, argued that central banks' focus on short-term inflation pressures did not guarantee financial and economic stability.

This article describes concerns by the Securities and Exchange Commission (SEC) that some firms in the bond market have been using their power to distort prices and make profits dishonestly. It has been revealed that the SEC opened an investigation into the activities of treasury bond dealers at UBS. The article indicates that with some note and bond issues, it seems banks can "squeeze" the market by getting their hands on much of the paper and then restricting supply.

The article discusses America's current-account deficit and a prediction that the dollar will decline sharply. The dollar's latest slide seems to have been triggered by uncertainty about the presidential election and a flurry of comments from Fed officials. The dollar has fallen by over 30% against the euro since 2001, but its trade-weighted index has fallen by much less because of heavy intervention by Asian central banks, aimed at holding down their currencies against the dollar. Some economists argue that America can sustain its large current-account deficit for at least another decade, without a sharp fall in the dollar, because it will be happily financed by China and other Asian countries. In a series of papers Michael Dooley, David Folkerts-Landau and Peter Garber at Deutsche Bank have argued that the present arrangements resemble a revived Bretton Woods, the system of fixed exchange rates after the second world war. Currency intervention by Asian central banks helps to explain why America has so far been able to finance its deficit without higher American bond yields or a bigger fall in the dollar. George Magnus, an economist at UBS, argues that the parallels with Bretton Woods are superficial. One big difference is that in the 1960s the United States ran a current-account surplus and was a net creditor to the rest of the world. Today, America is the world's biggest debtor, which could undermine the dollar's role as an anchor currency. Another important difference is that, unlike under the Bretton Woods regime, most Asian countries have scrapped capital controls or where they still exist, as in China, they are leaky. Under Bretton Woods there was no real alternative to the dollar as a reserve currency. Today there is the euro, into which Asians could diversify.

Describes the harsh effect the breakup of the Soviet Union and a fall in timber and paper prices is having on Finland's timber-based economy. Disappearance of Soviet export markets; Move to peg the Finnish markka to the ECU; Historical governing problems, including socialist paternalism; Election Finland's non-Socialist government for 25 years; Upcoming referendum on joining the European Community (EC); Debate over whether to join.

Discusses controversy in Germany over whether to postpone commitment to a European single currency. The significance of the issue to general elections to be held in September 1998; The issuing of a paper against delay by Chancellor Helmut Kohl's Christian Democratic Union and its Bavarian sister party, the Christian Social Union; Focus on those who are proposing delay; The sentiment of the German people.

The article focuses on the European Central Bank (ECB). The bank has been less aggressive than the U.S. Federal Reserve Board in its efforts to mitigate the global recession, cutting interest rates but not directly purchasing assets such as commercial paper as the board has done. ECB head Jean-Claude Trichet may propose a limited version of that policy at the bank board's April 2, 2009 meeting.

The article discusses trends in the value of the dollar and compared with the value of gold in international markets. Most economists hate gold. That it was used as money for millennia is irrelevant: it isn't any more. Modern money takes the form of paper or, more often, electronic data. To economists, gold is now just another commodity. So why is its price soaring? Over the past week, this has topped $450 a troy ounce, up by 9% since the beginning of the year and 77% since April 2001. A rising price of gold, like that of anything else, can reflect an increase in demand as well as a depreciation of its unit of account. The fall in the dollar is important, but mainly because as a store of value the dollar stinks. Now it is suffering one of its sharper declines. At the margin, extra demand has come from those who think dollars--indeed any money backed by nothing more than promises to keep inflation low--a decidedly risky investment, mainly because America, with the world's reserve currency, has been able to create and borrow so many of them. The least painful way of repaying those dollars is to make them worth less.

The article discusses the important role of economic institutions in monetary policy.From Latin America to South-East Asia, emerging economies that peg their exchange rates have suffered financial crises with alarming frequency in the past few years. Advisers of all sorts have urged them to let their currencies float on the foreign-exchange markets, and instead direct their monetary policy towards an inflation target. Swayed also by the success of inflation targeting in many developed countries, since 1998 at least ten emerging economies have taken this advice and have formally adopted inflation targets. Such intervention may make perfect sense, says a recent paper by Corrinne Ho and Robert McCauley of the Bank for International Settlements. Because exchange-rate fluctuations have a bigger impact on inflation, trade and financial systems in emerging economies than they do in developed ones, intervention may help those countries achieve their inflation objectives. The authors find that the "pass-through" from exchange rates to domestic prices is greater in emerging markets than in developed ones, because of poorer countries' often greater dependence on commodity trade. Ms Ho and Mr McCauley also find that pass-through is higher in countries with a history of high inflation and currency crises. Financial markets, which are underdeveloped in many emerging economies, are vulnerable to wild exchange-rate fluctuations. The central bank can use "sterilised" intervention: after selling its own currency and buying dollars to hold the exchange rate down, it can sell bonds to mop up extra domestic currency, rather than let it seep into the money supply and thus risk higher inflation.

Bad governments, when they run out of money, print more. But Zimbabwe's government has run out of the ink and special paper needed to print enough notes to keep pace with inflation, 365 percent and rising in 2003. Armed police have been deployed to calm the crowds outside banks, where people wait in line all day to withdraw money. Because it is so hard to get money out of the bank, no one wants to put it there in the first place. The government blames such "hoarders" for the cash crisis. Within 60 days, said the finance minister Robert Mugabe, the highest denomination note, the Z$500 bill (worth 14 cents), will cease to be legal tender. Hoarders must deposit their stashes in banks. A new Z$500 bill will be issued, and perhaps even a Z$1,000 bill.

Investigates why America's monetary base rose by 10.7% in the year to October. Contention of investment bank Salomon Brothers that the sharp increase is caused by pressure on the demand side of the Federal Reserve's balance sheet; What the monetary base consists of; Effects of increasing demand for paper currency; The broader monetary aggregate M2.