ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

COVID and MacroeconomicsSubscribe to COVID and Macroeconomics

Crumbling Firewalls

Ownership of banks by industrial houses will cost the economy dearly.

Will COVID-19 Change the Landscape of Financing Innovation in India?

The COVID-19 pandemic may affect the financing opportunities for innovation. The revenue loss induced by the pandemic is likely to divert the existing resources in aiding firm survival and economic recovery, with financing innovation taking the back seat. Highlighting the current state of innovation in the country, the rise of the country in its innovation ranking and its existing sources of funding is brought to the forefront. Various avenues presently exist for this purpose and more outlets could be explored to boost the funds for innovative efforts. Experience and policies of other emerging economies can help devise suitable measures that could further enhance India’s trajectory up the innovation ranking.

The Pandemic and Economic Fallout in South Asia

Coherent national strategies, backed by regional cooperation efforts, offer a way forward for economic recovery in South Asia, which is rapidly becoming the next COVID-19 global hotspot. Challenges and policies relating to macroeconomics, health, economic sectors, stimulus measures, and reforms, which are all crucial for the region’s recovery are discussed. */

COVID-19 in the Indian Context and the Quest for Alternative Paradigms

The COVID-19 pandemic has provocatively challenged the extant paradigm of development whose theoretical underpinning is derived from the neoclassical ideology of market-mediated growth. The Indian context of the pandemic is examined, and a reimagining of the development path for a more rational and egalitarian democracy is argued for. Some of the postulates of Thomas Piketty outlined in his Capital and Ideology are brought home as a pointer to stimulate thinking by all, especially the social scientists.

An Inconsequential Stimulus

The fiscal stimulus is too little to have any major impact on the economy.

Pandemic in the Eyes of the World Bank and the IMF

A damning critique does not allow India to remain self-complacent on the economic and health fronts.

Macroeconomic Consequences of a Lockdown and Its Policy Implications

The unprecedented lockdown has pushed economies into dire straits and also raised hopes that they would soon rebound to the old normal as soon as the pandemic is contained. But this is unlikely as the deterioration in the resource position and slump in demand can be reversed only by discarding the usual macroeconomic framework and by using a different approach and implementing out-of-the-box solutions. This analysis enables us to understand what policies may or may not work during and after a lockdown and the role of a stimulus and its magnitude.

China-bashing and Post-COVID-19 Narrative

The disruption of supply chains caused by COVID-19 has led to predictions that international firms will relocate production away from China, benefiting other emerging economies, including India. However, China’s integration with the global economy in terms of international finance, investment, construction and as a low-cost location for global production is now so deep that such changes will neither be quick nor painless. In fact, China’s innovations might allow it to even reinforce its position in the global economy.

A Faulty Response to the COVID-19-induced Crisis

India’s response to the COVID-19-induced economic crisis is proving to be ineffective. The neo-liberal embrace of monetary measures that infuse cheap liquidity as a substitute for fiscal activism has not resulted in faster credit growth. The reliance on banks and credit to mediate the stimulus, rather than directly injecting demand through government spending, is not working. Agents overwhelmed by a demand recession are not seen by banks as creditworthy borrowers, and the former in turn are reticent to borrow, fearing that they will not be able to service the debt.

Time for a Massive Fiscal Stimulus

Only bold interventions by the government can ensure a quick recovery of the economy.

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