The Twin Problem and China’s Next Steps

The cure can’t be worse than the disease. Really? One reason why the current economic crisis has foxed policymakers and central bankers all over is the ‘twin problem’ challenge confronting them. The ‘second’ problem is easier to solve. Consumer demand is weak in the economy and the government needs to act as the spender of … Continue reading The Twin Problem and China’s Next Steps

The future isn’t what it used to be

There’s always a tendency to overplay the place in history of a particular moment when you are living through it. Their deep scars on the face of time seem permanent then. Of course, they aren’t. Nature wears them down slowly in a battle of attrition that has only one winner.  There’s no Ozymandias and at … Continue reading The future isn’t what it used to be

The Long Road

In the long run all policies turn bad A public policy is designed to address a problem that’s here and now. If the problem weren’t urgent, the state would have demurred. That isn’t a bad idea. ‘Do nothing’ or ‘indulge in rhetoric’ are often sound public policy choices for the state. The need to act … Continue reading The Long Road

Externality, Amit Varma and Baby Doll

Solving for social distancing as a positive externality Public health has a positive externality. By practising good hygiene, eating well and exercising, I am healthy and, therefore, non-infectious. This benefits you as my neighbour or someone who meets me often although this wasn’t why I was spending money and effort to keep myself healthy. In … Continue reading Externality, Amit Varma and Baby Doll

The Indian Relief Package

The Republican economic relief package The Republicans are out with their draft rescue plan. This will be discussed with Senate Democrats; hopefully, approved and sent to Trump over the next few days. So, how did they identify beneficiaries for the direct cash transfer plan which we discussed yesterday? Anyone earning below $75,000 in 2018 would … Continue reading The Indian Relief Package

We are in a socialist utopia now

Everybody is a socialist during a crisis Bernie Sanders won’t certainly clinch the Democratic nomination, but he’s already won the elections. If politics is contestation for narrative dominance, he’s already home and dry. Free healthcare for all, direct transfer of wealth to the poor, free university education and a huge fiscal stimulus to help the … Continue reading We are in a socialist utopia now

This is different

Fed cuts rate to zero, what next? A key role of any central bank is to provide liquidity to the financial systems. During times of economic distress liquidity dries up – value of assets falls, demand shrinks, and businesses find it difficult to manage everyday operations. Central banks add liquidity into the system through multiple … Continue reading This is different

Covid-19: Where do we go from here?

You are at home. Working? Who’s checking? There’s a deadly virus out there in the world. But there’s over 1 lac hours of content on Netflix too. Ars longa, vita brevis (art is eternal; life is short). But wait! How long before reality snaps you out of Breaking Bad? Here then are some random musings … Continue reading Covid-19: Where do we go from here?

The Gig Workforce Needs The Chaar Dhaam Yatra

That the US$ 25 bn gig economy has emerged as the biggest job creator in India in the last 5 years shouldn’t surprise anyone. Look around! Gig workers abound – delivering biryani, driving us to airports or designing the cool web interface for your boutique. The 15 mn strong gig workforce though occupies a unique … Continue reading The Gig Workforce Needs The Chaar Dhaam Yatra

Covid 19: No Time for Schadenfreude

Covid 19 has hit China deeply already. Even if it makes a quick recovery in the next quarter, a valuable lesson has been learnt by global companies. They can’t put all their manufacturing eggs in one basket. While India should make every effort to gain from this reset, there’s one risk we can ill-afford to … Continue reading Covid 19: No Time for Schadenfreude