The Govts including the central banks all over the World have embarked on the expansionary policies and the debate to monetise the Cov19 crisis in order to maintain demand-supply or quantity and prices and economic growth which is supported by the Modern-Monetary-Theory – higher money supply could increase productivity and competitiveness through cheap factors of production- especially the capital and innovation – lower capital-labour ratio, though, higher unemployment and has made labour cheap too, lower prices and higher money supply and depreciation in the nominal exchange rate could further increase export demand.
Any stimulus would increase money–supply and demand and also lower cost of production and increase supply if the lower costs are passed on to the consumers, the virus has hit the economy so hard that supply and demand both have gone down and we also need both a demand and income side stimulus and a supply side or lower cost stimulus to increase real balances with the public which is likely to increase demand spending both consumption and investment as the lockdown diminish.
Money and lower interest rate at zero could increase the productivity of capital and more investment employment and demand-supply and growth... Higher unemployment and lower wages could also make the economy competitive... There is near certainty that the US economy would bounce back from the corona lows... If money supply is increased...
If lower cost of business are passed to the consumers, though more spending by the Gov could increase productivity and employment and demand... Transmission of lower cost to the consumers would mean higher productivity/lower prices and higher demand and supply would increase scale or market share...
There is prices or inflation or Financial Stability in the economy, investors get premia for holding the asset or inflation adjusted premium over time... Low inflation means the business could pursue expansion... and supply during high prices... That would stabilise price and expectations and financial stability... Low and stable inflation and interest rate are good for the financial stability...
Had INDIA a good unemployment benefit or insurance system it could bear more flexible labour laws for the wagers... Productivity increasing spending increase competitiveness... But, cutting real wages with inflation to increase currency depreciation and exports is unfair... Real wages in the developed countries have gone down despite increase in productivity... this has led to lower demand in the economy... though, unemployment has gone down...
Shale oil from the US is one of the reasons for oversupply of oil in the market because the biggest guzzler of oil (US) is now a net exporter of oil... US is not a part of oil cartel OPEC which makes it difficult to calculate to output cut to control the oil prices... At higher oil prices Shale production becomes more viable means more output... As long as the US doesnt join OPEC oil prices would see volatility or break up would help Arab emerge as winners because its cost of production is too low which could crowdout US shale, but Saudi needs $ 70-75 for its domestic budget balance...
The Chinese intention is to destabilise INDIA, but it wont help China either 'coz no one would invest in China since corona started only in china which is so irresponsible that we must test chinese idea behind the lab generated corona which is so destructive, it has affected the US in a big way with the global economy... china is trying to malign its image itself in an evil country which could push the world in the cold war mentality, especially with the US... and probably eventually leading to the WW-III... Corona has also affected the oil producing countries/oil prices, including Russia... Its a self destructive nation which should practice patience and tranquility...
The Gov could isolate people with symptoms in the Corona camps after the test and open up the economic activity...
It is an irony that when cases of incidence are at historic high Gov's are opening the economy in a phased-gradual manner... Isolating the patients still needed to be followed... Quickly isolating a patient can help reduce the spread in line with recovery in the economic activity... Proper vigilant on patients must continue... China is close to develop a vaccine for Cov19...
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