Nobel Laureate asked India to print more money and not to worry about inflation

[Darker45]

I would agree. Let tomorrow take care of itself. If there will be an inflation rate too high than what should be considered acceptable as a result of this, then the government and its monetary and economic teams will take care of it at the right time. They will cross the bridge when they get there. For now, the poor people, millions and millions of them are having an empty stomach. They urgently need food on the table!

Damn the torpedoes!

You are correct from one point that a lot of poor people are having empty stomach and something to be done to prevent that, through printing money but if it results high inflation in long run, people will have even more worst situation than the current. Higher inflation can destroy an economy easily. An economy should be planned for future too. If they only consider the current situation, they will have worst day in future of course.

We are not confronted with good and evil here; we are confronted with evil on both sides. So I guess we will just choose the lesser evil, so to speak. On the one hand, we have the choice to let the hungry, unemployed, home-isolated people take care of themselves while trying to keep the monetary foundation stable, at the same time fighting the spread of the virus. On the other hand, we may resort to drastic means which could be detrimental to the long-term economy and monetary value but could keep the people properly fed and therefore tamed and sane in these very trying times. I definitely prefer the latter. The urgency is on that side.

We cannot talk of preserving the future economy and let the people die of hunger or turn to violence. People are forced to stay inside their homes. They are physically hurt when they go outside. What are they going to eat, then? They cannot just start nimbling their walls. 

Finally, the issue is not whether or not the government will continue printing money out of thin air and commit slow suicide. That is happening all the time. The real issue is whether these money will go to the rich business owners or to the hungry majority.

[abhiseshakana]

We are not confronted with good and evil here; we are confronted with evil on both sides. So I guess we will just choose the lesser evil, so to speak. On the one hand, we have the choice to let the hungry, unemployed, home-isolated people take care of themselves while trying to keep the monetary foundation stable, at the same time fighting the spread of the virus. On the other hand, we may resort to drastic means which could be detrimental to the long-term economy and monetary value but could keep the people properly fed and therefore tamed and sane in these very trying times. I definitely prefer the latter. The urgency is on that side.

We cannot talk of preserving the future economy and let the people die of hunger or turn to violence. People are forced to stay inside their homes. They are physically hurt when they go outside. What are they going to eat, then? They cannot just start nimbling their walls. 

Finally, the issue is not whether or not the government will continue printing money out of thin air and commit slow suicide. That is happening all the time. The real issue is whether these money will go to the rich business owners or to the hungry majority.

According to modern monetary theory, what is meant by printing money is not the origin of printing money with a guarantee of thin air like Americans do, but like China does. In China, the renminbi is printed based on layered projects, for example: money printed by country A0, money is channeled to bank A1, money channeled to entrepreneurs A2 and, etc.

All projects in China, although not important as long as it is still beneficial to people's lives, will be funded by the government. With so many productive projects running, it means that the economy is spinning and labor is being absorbed more and more. With so many workers absorbed will improve the economy of a country and of course the economy of lower and middle class.

From the above explanation, it can be concluded that it is not the origin of printing money, because the collaterals are productive projects not fictitious, and the minimum project layered above 6. The money is indeed non-existent but supervision of its use must be very strict and properly monitored because printing money is not allowed to cover the consumption budget or pay the state debt. Another requirement is that all project raw materials must come from within the country, starting from facilities and infrastructure, raw materials, experts and even laborers. And infrastructure or projects built must be export-oriented so they can attract foreign exchange. Therefore licensing in China for business is made easy even China is encouraging its people to make as many projects as possible.

China has even made a leap forward with its BRI program, the location of the project does not have to be in China, it can be throughout the world as long as the raw materials, experts and workers are from China.
This is the model of colonialism 5.0 which is now intensively carried out by China.

[davis196]

Nobel Laureate Abhijeet Banerjee has recently asked India to print more money and transfer them to the poor class of people to increase demand in the market to tackle upcoming recession post COVID-19.

Reference: https://m.telegraphindia.com/business/abhijit-banerjee-offers-print-money-pill/cid/1763262

A lot of economists will say it is a bad idea because later it will become very difficult to arrest inflation rate. But increasing the demand is a major challenge as well.

Voice your opinion! Will be good or bad step for a diverse country like India?

All the novel laureate economists are fanatic fiat system supporters and they are constantly preaching about fiscal and monetary stimulus plans,quantitative easing and negative interest rates from the central banks,lower taxes and giving more money to the poor by the governments.Every time a recession happens,they preach the same stuff.They are like doctors,who are trying to cure flu,aids and cancer using only one remedy.
Even if the Indian government gives more money to the poor,they won't spend the money right away,because of the lockdowns.Most of the small "brisk and mortar" businesses are closed.

[avikz]

The feeling I get from India is that the leadership either doesn't know or doesn't care what real life is like for most people. They have their space program. They also have people who live in toilets.

The rescinding of bank notes fucked millions of people. Their lockdown fucked even more. How they didn't figure out that most people live hand to mouth on a daily basis and would face starvation within a few days is beyond me.

That being the case I think the Indian establishment should commit suicide and enrich the real people they're supposed to serve on the way down. Do it. It's not as if day to day life would be much more desperate than it already is.

I totally agree with it! The disparity between the riches and poor class is really eye-popping. The world's costliest house is in India and at the same time, world's biggest slum is also located in In India, in the same city indeed! It happens because India has been rules under bureaucracy since independence for the benefit of politicians where common people have no/little power! I too think the current administration should step down and let the young blood take over the country. Our PM failed us miserably and we are seeing highest number of social unrest due to the hate politics undertaken by the ruling party! It's a shame indeed! 

[Vishnu.Reang]

I totally agree with it! The disparity between the riches and poor class is really eye-popping. The world's costliest house is in India and at the same time, world's biggest slum is also located in In India, in the same city indeed! It happens because India has been rules under bureaucracy since independence for the benefit of politicians where common people have no/little power! I too think the current administration should step down and let the young blood take over the country. Our PM failed us miserably and we are seeing highest number of social unrest due to the hate politics undertaken by the ruling party! It's a shame indeed! 

Well.. being an Indian resident, I know the reasons for this eye-popping income disparity. The governments have repeatedly followed a populist approach, rather than taking concrete actions to remove or reduce the poverty levels. The single-most reason for poverty in India is uncontrolled population explosion, but yet none of the major political parties have the courage to talk about it. There are certain religious groups that refuse to participate in family planning and no one has the will to enforce the policies on them.

[coolcoinz]

The feeling I get from India is that the leadership either doesn't know or doesn't care what real life is like for most people. They have their space program. They also have people who live in toilets.

The rescinding of bank notes fucked millions of people. Their lockdown fucked even more. How they didn't figure out that most people live hand to mouth on a daily basis and would face starvation within a few days is beyond me.

That being the case I think the Indian establishment should commit suicide and enrich the real people they're supposed to serve on the way down. Do it. It's not as if day to day life would be much more desperate than it already is.

I saw a docummentary about life in the poor slums of India. There are whole communities, towns even, that live off segregating trash. Their houses are gull of plastic bags and bottles, they literally sleep on piles of plastic and wake up early every day to bring back more before the busy day starts and the city wakes up. They sleep during the day and work at night and morning to clean up the streets and get paid less than 5 dollars a day.
They have running asbestos factories that mix it with concrete to make roof tiles... They have people dismantling electronics in their back yards, working every day in fumes that kill them before they reach 40. India is crazy poor. Many parts of the country are a tipical third world where people live with farm animals in the same building and spend $1 a day on food because that's all they can spare.

[Betwrong]

Well, other countries have done it in the past^[1], the US has been doing it for awfully long time, and given the state of the world right now, I don't necessarily see this as a bad thing, people need physical cash in their hands, because not everyone can work from home. And if printing more money is the way, they should go ahead and do it.

An inflated economy is better than a non-existent/economy with a fuckton of unhealthy people.
^[1]https://www.dw.com/en/what-europes-banks-did-with-the-ecbs-trillion-euros/a-17848344

I absolutely agree with this, and, also, I don't think a Nobel Laureate in Economic Sciences could recommend something bad, regarding economy.

I just want to add one point, which may seem controversial, but that's what I think based on my experience. Poor people don't suffer from inflation because they don't have savings, and thus nothing in their possession can be devalued. A daylaborer spends all he earns the same day, or the day after, and if inflation comes, the prices rise and he's paid more for the same job.

The advice from the OP may not be suitable for all countries, but I think it would be a good step for India, where 30% of the total population lives below poverty line, earning less than $1 per day.

[gentlemand]

I just want to add one point, which may seem controversial, but that's what I think based on my experience. Poor people don't suffer from inflation because they don't have savings, and thus nothing in their possession can be devalued. A daylaborer spends all he earns the same day, or the day after, and if inflation comes, the prices rise and he's paid more for the same job.

If inflation really takes hold then the whole country seizes up and even if you're earning in an effectively inflation free way there might not be anything to buy. Look at supply chains, imports and production in places like Zimbabwe and Venezuela.

I don't know how you moderate it but you'd need to keep a careful eye on it.

[eaLiTy]

Although judging by the footage from India, their police have little mercy on people who do not follow the prescribed measures.

In most states in India police are taking strict actions against lock down violators including beating their ass up and giving them silly punishments, i do not support police brutality during this pandemic situation and today there is a terrible news coming from Punjab where people cut off the arm of a police officer when they tried to stop them. People are loosing their minds sitting at home and with brutality like these, its awful.

Keynesian is too old-fashioned and knowledge for IMF victims countries.

I do accept that Keynesian concept will not work in 2020, it is an age old concept and it worked well during the great depression but not anymore.

I don't know what the attitude of the Indian police is on a day to day basis, but in the UK the police are asking for cooperation mainly. If they all started chasing people around with sticks I don't think their legitimacy would last too long.

If people violate the lock down, impose heavy fines and take legal actions and if they violate again they should impose jail terms and make sure they understand the gravity of the situation rather than beating people like animals.

Plus, imagine if their government gave money to each household. 

Printing more money can have other dimensions too rather than giving money to each household, the government will allow people to loan amounts from banks with much lower interest considering many business lost money during these period and to help them out the government will provide loans, relief fund does not mean printing more money and since the suggestion is given by a Nobel award winning economist i expect some logic in what he meant.

[gentlemand]

In most states in India police are taking strict actions against lock down violators including beating their ass up and giving them silly punishments, i do not support police brutality during this pandemic situation and today there is a terrible new coming from Punjab where people cut off the arm of a police officer when they tried to stop them. People are loosing their minds sitting at home and with brutality like these, its aweful.

I don't know what the attitude of the Indian police is on a day to day basis, but in the UK the police are asking for cooperation mainly. If they all started chasing people around with sticks I don't think their legitimacy would last too long.

[mersal]

The same thing is going to be done by most other governments as well to tackle demand and supply issue in the economy.But this could be an eye opener for all the people who have been trusting the fiat money issued by the governments which is day by day the value of the money we having is going to get decreased so we need something which cannot be printed anymore like bitcoin.

[Averim]

Nobel Laureate Abhijeet Banerjee has recently asked India to print more money and transfer them to the poor class of people to increase demand in the market to tackle upcoming recession post COVID-19.

Reference: https://m.telegraphindia.com/business/abhijit-banerjee-offers-print-money-pill/cid/1763262

A lot of economists will say it is a bad idea because later it will become very difficult to arrest inflation rate. But increasing the demand is a major challenge as well.

Voice your opinion! Will be good or bad step for a diverse country like India?

In India there is no middle class, either you are very rich or so poor that they can't afford drinking water. Printing more money wont solve the problem because India is the country with the second biggest population so there is a need for good social politics, not just printing money.

[Betwrong]

I just want to add one point, which may seem controversial, but that's what I think based on my experience. Poor people don't suffer from inflation because they don't have savings, and thus nothing in their possession can be devalued. A daylaborer spends all he earns the same day, or the day after, and if inflation comes, the prices rise and he's paid more for the same job.

If inflation really takes hold then the whole country seizes up and even if you're earning in an effectively inflation free way there might not be anything to buy. Look at supply chains, imports and production in places like Zimbabwe and Venezuela.

I don't know how you moderate it but you'd need to keep a careful eye on it.

In Zimbabwe and Venezuela they were printing money, right, but they weren't giving it to the poor, as Abhijeet Banerjee suggested for India. Since this has never been done before, it's unknown how can it affect the economy overall. But most likely it would affect it positively since the suggestion comes from a Nobel Prize winner in Economy.

[Vanessamix]

The same thing is going to be done by most other governments as well to tackle demand and supply issue in the economy.But this could be an eye opener for all the people who have been trusting the fiat money issued by the governments which is day by day the value of the money we having is going to get decreased so we need something which cannot be printed anymore like bitcoin.

It won't be "eye opener" since fiat economy is not falling.
It is printing more money, it is inflating as hell, but it is not falling and people's faith will remain

[cabron]

The feeling I get from India is that the leadership either doesn't know or doesn't care what real life is like for most people. They have their space program. They also have people who live in toilets.

The rescinding of bank notes fucked millions of people. Their lockdown fucked even more. How they didn't figure out that most people live hand to mouth on a daily basis and would face starvation within a few days is beyond me.

That being the case I think the Indian establishment should commit suicide and enrich the real people they're supposed to serve on the way down. Do it. It's not as if day to day life would be much more desperate than it already is.

I totally agree with it! The disparity between the riches and poor class is really eye-popping. The world's costliest house is in India and at the same time, world's biggest slum is also located in In India, in the same city indeed! It happens because India has been rules under bureaucracy since independence for the benefit of politicians where common people have no/little power! I too think the current administration should step down and let the young blood take over the country. Our PM failed us miserably and we are seeing highest number of social unrest due to the hate politics undertaken by the ruling party! It's a shame indeed! 

This could be a way for us to look up as to why China had become very successful by the way how they rule their own people. Its always the militarize government that will win in the end and can control the baddest situation could ever happen like riots and chaos. Armed forces are always going to be the best solution to control that even a starving individual will just have to find a solution to feed himself and family instead of raiding someone else storage.

[Wexnident]

A Nobel prize winner wouldn't probably suggest anything stupid so it could be a possible move that their government could take. It's just, this move would probably require the government of India to closely watch over or maintain constant surveillance to the country's economy. As was said, the ones leading don't probably know what the hell is going on with their country, especially with the poor side, so this may actually be hurtful to them in the long run instead of actually helping. Well, it could help at the start, but really, without the government properly managing literally anything, inflation would probably just a matter of time and would severely impact their economy.

[mersal]

The same thing is going to be done by most other governments as well to tackle demand and supply issue in the economy.But this could be an eye opener for all the people who have been trusting the fiat money issued by the governments which is day by day the value of the money we having is going to get decreased so we need something which cannot be printed anymore like bitcoin.

It won't be "eye opener" since fiat economy is not falling.
It is printing more money, it is inflating as hell, but it is not falling and people's faith will remain

Inflation is the sign of fall and people won't recognize it until they turns out to be hyper inflation but most governments will keep the inflation under the moderate rate so people will have their faith remain but as an individual we have to see that value of fiat is falling and falling years after years.

[FanatMonet]

Printing money is always two sides of this decision, with one of them, it increases inflation and a decrease in real incomes of citizens, on the other, it will provide the demand for goods from the population, and will help businesses that help taxes to the state.

[crwth]

This wouldn't be a good idea. If they want to be like the Zimbabwean dollar with the hyperinflation thing affecting their economy, go right ahead. I think the best move for India is just to ask the private and government companies to help the needy. It's just the same right? Helping them without affecting the economy.

[audaciousbeing]

Nobel Laureate Abhijeet Banerjee has recently asked India to print more money and transfer them to the poor class of people to increase demand in the market to tackle upcoming recession post COVID-19.

Reference: https://m.telegraphindia.com/business/abhijit-banerjee-offers-print-money-pill/cid/1763262

A lot of economists will say it is a bad idea because later it will become very difficult to arrest inflation rate. But increasing the demand is a major challenge as well.

Voice your opinion! Will be good or bad step for a diverse country like India?

Other than what we have been taught in classes as to the effect of excess money in circulation, a Nobel laureate is surely not some quack or speech writer looking for attention. It must have been from a fully thought out process but that does not mean its right. Zimbabwe to my understanding have tried this model which eventually backfired but situation, economy and time differs which could return a different outcome. Its on government and its policy advisers to think a way through and actually address his fear rather than just discarding his own private suggestion.