, dr. jha served as india ’ s ambassador to the united states and as governor of jammu and kashmir. he was also a member of the widely acclaimed brandt commission which made a persuasive case for north - south cooperation. that some of the issues raised in the brandt commission are relevant even today is a testimonial to the foresight and wisdom of the commission ’ s members such as dr. jha. 5. this lecture series in his name honours dr. jha ’ s outstanding service to the nation and his leadership of the reserve bank during a very critical period. so far, there have been 11 lectures. the last one was given by prof. john taylor in february 2010, two years ago, on “ lessons from the financial crisis for monetary policy in emerging markets ”. the lecture by prof. obstfeld this evening will be the 12th in the series. the distinguished speaker – prof. maurice obstfeld 6. it is perhaps presumptuous to introduce prof. maurise obstfeld, who is a distinguished academic and internationally renowned economist. regardless, i will indulge in the pleasure of doing so because the occasion demands it. 7. prof. obstfeld is currently the class of 1958 professor of economics and director of the center for international and development economic research ( cider ) at the university of california in berkeley. he got his doctorate from the massachusetts institute of bis central bankers ’ speeches technology ( mit ) in 1979 under the supervision of the legendary professor rudiger dornbusch of the textbook fame. thereafter, prof. obstfeld taught at columbia, university of pennsylvania and harvard before moving to uc, berkeley in 1989. 8. publishing papers is part of plying the trade of being an academic. a few of them also write text books. but far fewer of them write text books that become standard teaching material cutting across university and national barriers. prof. obstfeld belongs to that select category. many among the audience here must have learnt economics from his seminal textbook on international economics, co - authored with prof. paul krugman. 9. economists have been categorized in several ways – classical and neo - classical, macro and micro, keynesian and monetarist, free market and leftist. it is fashionable these days to categorize economists as salt water or fresh water to classify their academic persuasion which, curiously, seems to be correlated with whether their university is located inland or on the coast. prof

concluding, it will be remiss of me not to address the relationship between the real and the financial sectors in the context of globalisation, open economies and macro finance. economists have for long recognised the strong complementarities between the real and the financial sectors. financial development contributes to growth in either a supply - leading or a demand - following sequence ; that is, either the financial sector development creates the conditions for growth or the growth generates demand for the financial services. it is important to recognise that the financial sector in india is no longer a constraint on growth and its strength and resilience are acknowledged, though further improvements need to take place. on the other hand, without the real sector development in terms of the physical infrastructure and improvement in supply elasticities, the financial sector can even misallocate resources, potentially generate bubbles and possibly amplify the risks. hence, public policy may have a crucial role to play in ensuring balanced reforms in both the real and the financial sectors. the criticality for the policy makers is not only to ensure that there are no financial sector constraints on the real sector activity but also to assure that the financial sector reforms have complementarity with the pace and process of reforms in the real sector in india, along with, no doubt, fiscal empowerment – as consistently emphasised by the reserve bank. let me conclude by complimenting all those who have devoted their energies to bring to fruition this innovative collaborative academic activity with policy significance for the reserve bank of india. i am thankful to the organizers, specially prof. nachane for giving me this opportunity to be with you. we, in the rbi, look forward to the benefit of discussions in this conference. let me wish the conference all success, and, with success, hopefully many happy returns. thank you.