Joint credibility of both the central bank and fiscal authority,complemented by political stability, plays a critical role in maintaining macroeconomic stability of an economy, India’s Planning Commission former Deputy Chairman Dr. Montek Singh Ahluwalia said.
Speaking at the ninth International Research Conference of the Central Bank at the John Exter International Conference Hall of the Central Bank he highlighted the importance of the ability of central banks to guide the markets through credible policy actions, in which quality research plays a pivotal role.
Moreover, he pointed out the importance of shared efforts by the Central Bank and the fiscal authority to control aggregate demand in the economy by means of appropriate monetary instruments and fiscal tools.
Dr. Ahluwalia stated that appropriate modelling of institutional constraints in developing countries and the selection of right models are crucial for providing model based economic advice for macroeconomic policy making.
This year’s conference was held under the broad theme of ‘Sustainable Development and Macroeconomic Policies in a Challenging Global and Domestic Environment’.
Central Bank Governor Dr. Indrajit Coomaraswamy making the inaugural address highlighted that social development has to be supplemented by creation of wealth and productive employment, in which quality of growth is an important factor.
“Moreover, promotion of inclusive growth primarily through empowering people with education, training and skills development, presence of social safety nets, environment sustainability, gender parity and regional balance are essential for sustainable development.”
Further, the Governor emphasised that in the context of a challenging global economic landscape, developing countries like Sri Lanka need to attach a high premium on prudent macroeconomic management.
“Under this, developing clear and stable frameworks for macroeconomic policymaking remains imperative. Such frameworks would enhance predictability and certainty of actions of the policymakers, while creatingnecessary space to weather exogenous shocks.”
Professor Lalith Samarakoon, Professor of Finance, University of St.Thomas, USA, making an presentation on ‘A Blueprint for Developing the Sri Lankan Financial Markets’ highlighted the key elements that need to be embedded in a capital market development plan.
He identified economic development policy and mechanism, financial sector development policy and mechanism, and national level policy and high-level commitment as an indispensible trinity in a national framework for capital market development.
The conference was organised by the Economic Research Department of the Central Bank, aiming to stimulate research on contemporary themes.The conference brought together distinguished members of academia, government institutions, policy making bodies and research institutions. (SS)
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