Foxconn comes to India!

Do aur Do Paanch?

Konichiwa (今日は) Kgpian,

It’s our one month anniversary! Tempo Se!

One of our authors has had “displeasing” experiences with the number 4. Hence, we have decided to skip the fourth issue and move on to the fifth. Because Swag.

Also, we believe in creating jobs. Hence, we’re excited to announce a new member on the Editorial Board!( That’s what the unemployed author is calling us now; he says it sounds cool and looks good on a grad school application or when picking up women at Tikka)

We wish him the best and hope we can bring to you more frequent and informative posts about the top news across the week from the economic and financial world

Happy Reading!

iFoxconn

Foxconn the world’s largest contract manufacturer of smartphones announced it would be investing $5 bn in Maharashtra, last weekend. That’s not all folks, Chandrababu Naidu got AP its mojo back as Xiaomi announced that it would assemble its phones in the state. Taiwanese influence may be coming to our movies too, as Foxconn looks keen to pick up stakes in Mukta Arts or Whistling Woods International. Both names we don’t know, but they make movies and one of them has Subhash Ghai. An opinion piece from the ET mentions “geographical derisking” as one of the reasons for Taiwanese firms’ (like Foxconn) into India. Which is to say, these firms are scared of China. Lastly Foxconn also announced it would Invest in Snapdeal along with others of course.

Make in India, finally seems to be becoming more than a slogan.

Why so Moody?

International credit assessor Moody’s Investors Service on Tuesday forecasted that India’s growth would slow to 7% in the year to March from 7.3% in the previous year because of below-normal monsoon rain. It had earlier estimated a 7.5% growth rate for this year.

In April, the India Meterological Department (IMD) said India could experience a second consecutive year of sub-par monsoon rainfall, amplifying worries for policymakers and farmers after last year’s drought-like conditions, and unseasonal winter showers that damaged standing crops and eroded rural demand.

This is bad news for the Modi government which has been pulling out all stops to quicken growth and foster investment in the economy.

Quaking Japan

Prime Minister Shinzo Abe introduced policy reforms (Abenomics) which managed to bring Japan out of a 20 year deflationary spiral (good right?) only to shrink just after 2 quarters (not really!). The world’s third largest economy, shrunk for the second consecutive quarter this year, after showing signs of coming out of recession.

Japanese Economy is on a rough ride as it has seen near zero growth in 2014. Wages haven’t increased, prices gone up and exports fell hard. So has Abenomics failed? Financial Times has an interesting read. What can Japan do about the future? Etsuro Honda has something to say on the matter. Abe’s adviser should call him rather than the Wall Street Journal it seems.

What in the name of god is a deflationary spiral? And how it applies to Japan.

Economist of the Week

It’s girl power this week as we look at Janet Yellen, the first female chair of the Fed. Educated from Brown and Yale universities, Yellen then went on to teach at Harvard and finally land her first position at the Fed in 1977. Since then, she has been an integral part of the Fed’s policies and was rewarded finally in 2013 when President Obama nominated her as a replacement for Ben Bernanke.

Yellen has been an outspoken advocate for using the powers of the Federal Reserve to reduce unemployment, and has seemed more willing than other economists to risk slightly higher inflation to accomplish this goal.

Her most influential work is probably “The Fair Wage-Effort Hypothesis and Unemployment” which she expounded with her husband, Nobel Laureate George Akerlof in 1990.

She is in the hot seat now with the Fed considering to loosen the reigns on the Monetary Policy and allowing interest rates to increase marginally for the first time since 2004.

Fin.

P.S. We hope you enjoyed reading this as much as we do making it.

In case you feel there’s something we have missed out on that we should have included, do let us know why by dropping us a mail at theeconpill@gmail.com, or ping us over social media.