Videos by Weerakoon A Wijewardena
The speech delivered at the General Convocation of Northumbria University in December, 2016 accep... more The speech delivered at the General Convocation of Northumbria University in December, 2016 accepting the Hon Doctor of Civil Law Degree. 3 views
When governments finance budgetary expenditure by printing money, the eventual inflation works as... more When governments finance budgetary expenditure by printing money, the eventual inflation works as a tax to transfer resources from people to the government. But that tax is regressive and falls on low income people. 1 views
Papers by Weerakoon A Wijewardena
Journal of Political Economy, 1967
ESPITE the large volume of recent Th literature on economic growth, little has been done to integ... more ESPITE the large volume of recent Th literature on economic growth, little has been done to integrate monetary factors in the explanation of the growth process. Most of the growth models are "real" models, in the sense that they manage to ignore the monetary structure of the economy and focus only on real variables. The construction of these kinds of non-monetary models is completely justified if one is able to show that the monetary structure has no effect on the real variables of the system, that money is neutral. The neutrality of the monetary sector is a problem that has been widely discussed in the monetary theory literature. In terms of the standard macroeconomic model, if prices are flexible and if wealth is not an argument in the saving function, a once-and-for-all change in the quantity of money will not affect the real variables of the system. Since a great deal of the growth literature, such as that of Solow (1956) and Swan (1956), assumes that saving is not affected by wealth and, particularly, that the community saves a constant proportion of income, it would seem that ignoring the monetary sector is a proper way of simplifying things. The explanation of the growth process could then be decomposed into two subsets of problems: (1) the determination of the real variables, including the rate of growth of the economy, and (2) the determination of the monetary variables. This paper shows, however, that neglecting the existence of alternative assets to real capital in the neo-classical model of growth, with saving being a constant proportion of income, is not a proper way of simplifying the analysis. The mere existence of outside money, independent of the rate at which the money stock grows or declines through time, will prevent the economy from attaining the Solow-Swan steady state capital stock. The capital stock for which a monetary economy reaches its steady state is always smaller than the one indicated by the Solow-Swan model. It therefore follows that the golden-rule saving ratio is not any more the one that maximizes long run consumption. For long run consumption to be maximized the saving ratio has to be greater than the share of profits in national income. On the other hand, the recent work on economic growth in a monetary economy, by Tobin (1965) and by Johnson (1966), centers on the steady state features of the economy; there is no rigorous discussion of how the economy reaches this steady state, nor of what the conditions are under which this steady state, if attained, will be maintained. Also, since attention is focused on steady state solutions, there is nowhere an analysis of how changing market conditions affect *A first draft of this paper was presented in April, 1966, as a prospectus for the author's Ph.D. dissertation at the University of Chicago. For their helpful comments and suggestions, grateful acknowledgment is given to Hirofumi Uzawa, Arnold Harberger, Robert Solow, and Arthur Treadway. The author also takes sole responsibility for any remaining errors.
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Blockchain technology has been a disruptive technology not only for cryptocurrencies, but also fo... more Blockchain technology has been a disruptive technology not only for cryptocurrencies, but also for banks. In the case of payments, it has bypassed banks and other financial/non-financial institutions that deal with payments. The blockchain technology, though slower than many of the other payments methods is characterised by the unique feature of not-easy to hack.
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Digital age is not new or alien to the financial services industry. When the new breakthroughs of... more Digital age is not new or alien to the financial services industry. When the new breakthroughs of information and communication technology (ICT) hit the world in early 1960s, it was the financial services industry that embraced them before any other industry. It was done as a necessity rather than as a passion or fashion. The necessity arose from having to cope with the strict competition that engulfed financial services institutions cutting into the thin profit margins and thereby threatening their long run survival. At the same time, objectives like inclusive financing needed them to have a wider outreach without increasing costs. The industry could not do so relying on the prevailing production model. That model had been based on having a larger geographical coverage with a wide branch network. However, such a branch network required these institutions to employ more people at increasing costs. Thus, the embracing of ICT breakthroughs helped the industry to cut costs, provide better and more efficient services to customers and have a wider outreach without increasing costs. Empirical studies have found that application of ICT have had a positive impact on banks' profitability 1. The improvement in profitability should come from the benefits which the customers, banks and employees should receive from the application of ICT as an integral part of the operation of banks 2. The McKinsey Global Institute, in a report published in September 2016, has highlighted that digital finance could serve the down-trodden in society by providing access to credit and savings products 3. Thus, digital technology is not only for the higher ups in the social stratum; it is for all, helping societies make their financial services inclusive. Sri Lankan banks have embraced advancing ICT after liberalisation of the business in 1977 After the liberalisation of the banking system in 1977, banks in Sri Lanka too embraced digital technology, albeit in a slower pace. It is the foreign banks which provided the digital services to their customers in the initial stage. They were soon followed by private commercial banks which too invested heavily in ICT infrastructure as well as in ICT based human capital. The state banks were the last to enter the field but managed to accomplish the task within a few years. As a result, all commercial banks in Sri Lanka today are unibanks providing services to their customers from any of their branches located throughout the country and offering a gamut of internet banking services to them from any part of the world. Starting from basic automated teller machines or ATMs which functioned as cash dispensers and cash deposit accepting devices, Sri Lanka's ICT based banking is now providing to their customers all the advanced services which banks in the developed world are providing to their customers. Yet, ICT does not stay in a single place and is subject to constant evolution and improvement. In this sense, banks are lagging behind in the application of ICT compared to other industries like healthcare services or defence services. The challenge for banks today is to narrow this gap by catching up with other fast ICT users.
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Modern economies should be creative economies with inventions made by researchers and scientists ... more Modern economies should be creative economies with inventions made by researchers and scientists and innovations made by entrepreneurs. The paper discusses how Sri Lanka should successfully tackle the challenge of converting its simple product economy to a complex product economy by promoting inventions and innovations.
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Bank of Ceylon, the longest surviving domestic commercial bank in Sri Lanka, celebrated its 75th ... more Bank of Ceylon, the longest surviving domestic commercial bank in Sri Lanka, celebrated its 75th Anniversary in 2014. The article traces its birth and evolution over this period. It has found that the Bank which was started as a state-aided bank during the colonial time for valid reasons was nationalised in 1961 to make it more amenable to national interests. However, this model has not been successful since it has been subject to unwarranted political influence. The article concludes that its future is critical if it goes along with the state ownership.
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Sri Lanka's policy authorities have adopted as a medium term economic policy to double the per ca... more Sri Lanka's policy authorities have adopted as a medium term economic policy to double the per capita income in US dollar terms within a period of 7 years. This paper discusses economic and statistical issues involved in this policy objective and argues that such a doubling does not necessarily leads to an improvement in the well-being of a people
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A development that has emerged in many developing countries today is the rise of cultural nationa... more A development that has emerged in many developing countries today is the rise of cultural nationalism in which there is a major culture seeking to subdue all other sub-cultures. In Sri Lanka, this has been predominantly observed in the majority Buddhist culture, redesignated as the Sinhala Buddhist Culture seeking to overwhelm all other religious groups. The paper delivered as the First Professor Sudatta Ranasinghe Memorial Oration argues that it is a bane rather than a boon for a country.
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This paper argues that public policy towards the environment, prompted by perceived and potential... more This paper argues that public policy towards the environment, prompted by perceived and potential market failure, has gone beyond the tenets of the normal public action and has, therefore, brought in serious implications for the sustainability of the environment. The defects have arisen out of the misunderstanding on the part of policy makers of the requirement of using the environment as an essential input for all economic activities, i.e., to use it as a dumping ground for the waste-matter (bads) produced as a package when desired outputs (goods) are created. The forceful acquisition of the property rights over the environment by the state and its control of the environment through the penalty imposing bureaucracies have not been successful in attaining its objectives giving rise to a wide-spread public dissatisfaction about the government action. Hence, the numerous action groups which have sprung-up as protectors of the environment have made the call for the de-nationalisation of the environment in their favour. Hence, the greatest challenge before public authorities has been to decide how they should co-exist with the extremistic action groups, while ensuring a free use of the environment for the well-being of the society.
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There is a common belief that inflation at a mild level is necessary for economic growth in devel... more There is a common belief that inflation at a mild level is necessary for economic growth in developing countries. This view is presented to justify the imposition of inflation tax by governments. This paper argues that inflation even at a mild level at the beginning will regenerate to a high inflation and eventually the countries have to sacrifice all the good attainments in macroeconomic managemnent.
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The retail banking landscape has changed considerably in the past few decades benefiting from the... more The retail banking landscape has changed considerably in the past few decades benefiting from the advancements in information and communication technology (ICT). Hence, retail banks have to change their outlook and strategies to fit the changing retail banking world. If banks do not adapt themselves to the changing world, the inevitable consequence will be the extinction of retail banking. Hence, their challenge today is adapt or perish.
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Drafts by Weerakoon A Wijewardena
Green Accounting has been proposed by the UN system to replace the presently compiled national ac... more Green Accounting has been proposed by the UN system to replace the presently compiled national accounting system to overcome its deficiencies relating to the measurement of welfare of mankind. The article argues that though the intention is laudable, the systems have so far not been developed for global application. Hence, it still remains a hype which need be converted to reality.
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Videos by Weerakoon A Wijewardena
Papers by Weerakoon A Wijewardena
Drafts by Weerakoon A Wijewardena