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The Future of the Indian Rupee Is Tied to Oil Imports

By Ignatius Chithelen, Knowledge@Wharton November 15, 2013

The weakness or strength of the Indian rupee in the long run will continue to be largely determined by the level and costs of the country’s crude oil imports.


Entrepreneurs in India and Abroad

By Ignatius Chithelen and Shankar Parameshwaran*

From The New Oxford Companion to Economics in India, Oxford University Press, November 2011; essay updated for 2011 edition; original in first edition 2007. 

This essay seeks to answer why Indian professionals succeed as entrepreneurs in the US but are far less successful in India.


Illegal Insider Trading: A Reflection of Character

by Ignatius Chithelen Knowledge@Wharton, India October 22, 2009 
Summary: recent news of illegal insider trading charges against Raj Rajaratnam of Galleon Group, a US$3.7 billion hedge fund, has inspired a round of gallows humor on Wall Street. But the charges against Rajaratnam and five others also raise fundamental questions about the relationship between character and success, and why investors need to take notice of any potential red flags.

Review of Warren Buffett’s Biography The Snowball: Warren Buffett and the Business of Life by Alice Schroeder (Bantam Books, New York, September 2008 Hardcover 976 pages $35.00) 
by Ignatius Chithelen, Knowledge@Wharton, July 15, 2009. *K@W does not list the names of authors in articles it publishes in its US edition. 
Excerpts: Buffett’s most important act is donating his wealth, mostly to the Gates Foundation, and that too to be spent in twenty years, mainly on health care and education. As Buffett states, “… the idea of passing wealth from generation to generation so that hundreds of your descendants can command the resources of other people simply because they came from the right womb flies in the face of a meritocratic society.” Also, unlike most other philanthropists, 78 years old Buffett has not set up a foundation nor paid for buildings at hospitals or museums to try to perpetuate his name..... As an investor, Buffett is fearful when others are greedy, holding onto the cash generated by Berkshire’s businesses …..Then, during severe stock market or industry declines, he is greedy when others are fearful, buying good businesses at very attractive prices. Buffett’s three rules of portfolio management are: 1) don’t lose money; 2) don’t forget rule one and 3) don’t go into debt. His focus, an intellect which is a perpetual learning machine, rationality, confidence and an ambition from childhood to become rich, are identified by Schroeder and others as the personal traits that drove his success. Then, he attracts talented people to work, partner and deal with him due to his honesty, fairness, letting them do their job without interference and crediting them for any success.

Emerging Markets and Commodities: Post crash scenarios amidst turbo coupling 
by Ignatius Chithelen Knowledge@Wharton, India February 12, 2009 
Summary: Emerging markets are not de-coupled but turbo coupled to developed markets. Mexico’s hedging of its oil exports reveals a likely cap on commodities’ prices over the short to medium term. China will likely emerge as the big winner from the current financial and economic crisis. Coming trends in outsourcing may not be a repeat of what happened after 2002. Analyzing politics and policy, including in the US and EU, will be as important as looking at economic and financial data. 
Web link to article: Web Page

US housing market and the global financial crisis: A long way from Ignatius Chithelen Economic & Political Weekly, August 21, 2008

Summary: given excess supply and falling demand, US home prices are likely to drop further. An additional one trillion dollars in losses may have to be recognized by institutions that hold mortgage and related securities. The US and most other stock markets are likely to be flat or down, at least over the next few years. However, if inflation stays high in the US or if there are unforeseen shocks, financial markets will likely see more severe declines and the current global economic slowdown will worsen.

Bust in US Housing – Causes and Implications 
by Ignatius Chithelen, Economic & Political Weekly, November 24, 2007 
Summary: The Federal Reserve Bank fuelled a housing boom in the US, by cutting its funds rate to a multi-decade low of 1%. By not raising rates quickly, to curb wild speculation, it blew up a housing bubble – following a series of other bubbles since 1987. Now, the Fed and other major central banks are cutting rates and providing liquidity to calm financial markets worldwide, hit by fallout from the deflating housing market. Speculators expect the banks’ actions to blow bubbles in areas like emerging markets and commodities, which though have had strong recent gains. Meanwhile, any major conflicts over the declining US dollar will trigger more global financial turmoil. Another potential source of trouble will be over China’s seeking higher returns on its growing dollar reserves. China though has a raging, home grown stock market bubble. Its collapse could weaken China’s clout, while also hurting returns from emerging markets and commodities.

Why Indian Entrepreneurs Succeed in the US
by Ignatius Chithelen, Barron’s December 12, 2007
Based on essay published in book that is listed below. 
Web link to article: Web Page

Crude Oil Prices: Heading to New Highs 
by Ignatius Chithelen, Economic & Political Weekly, March 26, 2005 
Summary: Rising consumption in the US, China and countries like India is expected to push up worldwide demand for crude oil in the years to come. But the long-term supply situation looks not too promising as chances of finding massive low cost reserves appear slim. Studies have also shown that the major low cost oil fields in Saudi Arabia have reached their peak and the kingdom could see a 30 to 40 per cent decline in production within three to five years.

Outsourcing to India: Causes & Prospects 
by Ignatius Chithelen Economic & Political Weekly, March 6, 2004 
Summary: The demand for skilled Indian labour in IT is big and growing in the US. But as more US jobs move to India, the constraints of supply of skilled, English-speaking professionals are likely come to the fore. If this leads to a drop in service quality, American businesses, already under attack for fuelling job losses in US, may be forced to close their operations in India. The experience of Ireland, which in recent years has seen a reversal of the growth of outsourcing serves as a warning example.

Origins of Co-operative Sugar Industry in Maharashtra

By Ignatius Chithelen, Economic & Political Weekly April 6, 1985

This paper seeks to understand the origins of the co-operative sugar industry in the Ahmednagar district of Maharashtra, India’s largest sugar producing state. The conditions leading to the emergence of rich peasants in the region in the early 1900s and their relevant characteristics are discussed in Section I. The spread of canal irrigation, coupled with financial support from a co-operative credit infrastructure, enabled the rich peasants to cultivate sugarcane, extensively as well as intensively, as seen in Sections II and III. A series of defensive responses by the rich peasants, during the Great Depression of the 1930s, created the conditions for the shift in the 1950’s to co-operative manufacture and marketing of sugar. These conditions and the setting up of the first sugar co-operative are discussed in Section V.

Rich Peasants, Industry and Accumulation-Payment of Cane Price by Maharashtra s Sugar Co-operatives


By Ignatius Chithelen, Economic & Political Weekly, December 24, 1983

A non-Brahman rich peasant elite, engaged in sugarcane cultivation for about half a century, had by the 1950s established a powerful position for themselves in the socio-political and economic life of Maharashtra. This power, which they continue to wield, has its chief economic base in sugar, both cultivation of sugarcane and its processing. This paper seeks to understand the main mechanism – payment of sugarcane prices – through which the rich peasants use the industrial extension of their agrarian operations to further their accumulation of capital.