IB Economists

India is said to be developing land of more than 450,000 acres, in order to attract Companies who would want to leave China. Tensions between the US and China have rised after the US blamed China for the development of the coronavirus disease. A rise in tension could include a trade war by both countries adding tariffs and hence making it worse for companies producing in China. This is the perfect opportunity for India to give shelter to the companies willing to leave China. If India makes the best of this then they could see companies setting up industries in India which will make products in India cheaper, improve the balance of trades, contribute to GDP growth, create employment and generate tax revenue. The industries setting up will make the goods cheaper since the goods will be produced in India and tariffs and quotas can be avoided. Some amount of goods will also be exported and the overall imports will be reduced, hence increasing the injection and reducing the leakage from the...

The Pakistan government has lifted a ban on Indian medicinal drugs and raw materials required for these drugs. The decision came after the pharmaceutical industry demanded to lift the ban, since there was a shortage of multiple drugs. Pakistan has imported various vitamins as well as vaccines for diseases such as polio and tetanus. India has been supplying drugs to countries all around the world(HCQ dilema link) during the time of this pandemic. The lift on import for drugs will help Pakistan since it was having a shortage of drugs and these essential goods. This will help the country fight other diseases while the pandemic is going on and this is important because it will help save lives, which will help increase the life expectancy of the people while also maintaining a healthy workforce which is important once the lockdown ends and people will have to go to work. The sale of these medicines will also pump revenue for the retailers in Pakistan, at a time when the aggregate demand and...

The Uttar Pradesh government announced that it would be suspending a few labour laws for the next three years. They did this to help reduce the impact of the Covid-19 Pandemic on the labours. The suspension of these laws can help increase employment. The labour laws are primarily used to protect labours and provide them with healthy and safe working conditions, equal and right pay and stop wrongful termination. However, there are more labour laws which ensure that the firms are working in good will. Sometimes laws may be very strict and lead to a rigidity in the labour market.  For example, if there are minimum wage laws which are higher than what the employers are willing to pay, it reduces the demand for labour and hence firms will hire less labours, resulting in structural unemployment; similarly, strict laws for firing labours can lead to firms being more harsher in hiring employees and end up hiring less employees. A deregulation of the labour market can usually help in reduci...

The confederation of All India Traders (CAIT) said in a statement that nearly 20% of Indian traders could run out of business in the upcoming months, According to CAIT nearly $72 Billion has been lost in revenue in the period between 25th March to 30th April. Out of the 70 million traders who have suffered, 15 million traders will have to close down permanently. The traders are mainly made up of small and medium sized retailers. CAIT claims that there is no synchronization between the central and state governments and the home ministry have not helped the situation on the ground. They are looking for intervention from the government in order to minimize the impact. Earlier, Nobel Prize winner - Abhijit Banerjee suggested that India needs a big stimulus package in order to recover from this economic crisis. The Indian government has failed to introduce any stimulus package in order to help the economy. A lack of any help from the government can lead to a rise in unemployment and push ma...

The United States Bureau for Labour Statistics recorded an unemployment rate of 20.6%, which is the highest ever recorded since 1934.  Due to the Covid-19 pandemic, the aggregate demand in countries all around the world are falling. The world's largest economy and the country which has the highest number of cases of Coronavirus has seen a surge in the unemployment rate.  The United States is the world's largest exporter of goods after China and the fall of demand for goods all around and the world and slowdown in international trade has led to most industries in the United States coming to a halt or reducing the production to meet demand. Since reducing supply requires labourers to be made redundant and hence increasing unemployment. Services such as restaurants, movie theatres and public transport are not in demand and hence workers from these sectors are also being made redundant. A rise in unemployment levels is a bad indicator and comes along with a slowdown in the economy...