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Modi’s Fiscal Follies (Project Syndicate, 6 min read) ‘If households decide to save more and consume less during an economic slump, then the correct policy response is to increase government spending. Unfortunately, Indian Prime Minister Narendra Modi’s government is doing the opposite during the current pandemic-induced downturn.’ [Bearish India]
United States of Despair (Project Syndicate, 8 min read) Angus Deaton and Anne Case believe ‘those entering the labour market in 2020 will have a lower earnings path throughout their working lives, possibly creating the despair that brings death from suicide, alcohol, or drug overdoses. In other words, the most likely post-COVID America will be the same as pre-COVID America, only with even more inequality and dysfunction.’ [Bearish US]
What is Next in the Policy Revolution? (Advisor Perspective, 5 min read) Combined fiscal and monetary stimulus in developed markets has cushioned the economy more than the estimated fall in the GDP. This now raises a risk of ‘policy fatigue’ leading to an early exit or a cutback, especially in the US, which saw the labour market improve significantly in May.