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/1763262A 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?
Well, these are economic reactions of these coronavirus lockdown:
1. Limited in production and supply being that many non essential sectors are temporarily closedown.
2. Demand is obviously higher than supply- for both essential and non essential goods.
3. The income level of people can't sustain the economy at this state of little or no incoming of income.
4. Printing the rupee and injecting it into the economy will cause a demand-Pulled inflation, a situation were too much money is chasing few goods.
Well, that's not a good monetary policy at this stage of the economy.