Sri Lanka statistician propounds new theory; takes on central bankers

Sept 14, 2007 (LBO) – Sri Lanka's top statisticians put forward a new theory on exchange rates and took on the central bank governor and Fed chairman Ben Bernanke in a bid to explain rising inflation with long discredited failed ideas. . Hidden Theory

Questioned by journalists about the falling Sri Lanka rupee, especially at a time when the dollar was being routed by the Euro, Sri Lanka's Department of Census and Statistics said the phenomenon was explained by the 'hidden' reason.

Director D Amarasinghe said Sri Lanka's import growth was low, export growth was higher, and the current account deficit of the balance of payments could be bridged by rising remittances.

"According to known economic fundamentals the rupee should be going up," Amerasinghe told reporters.

"But due to 'hidden reasons' the rupee is falling. These hidden reasons could not be explained by macro-economic fundamentals; that is something you must understand.

"That is the clear problem that is existing today."

He did not elaborate on the hidden reasons.

Fossilized Curve

The statistics office also resurrected a fossilized economic theory that had helped bring many countries to grief and challenged the thinking o

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