IB Economists

Recently, the prime minister of India Narendra Modi announced an injection of 20 lakh crore into the economy. The aim of the investment is to help India take a step forward towards economic stability. According to news, The PM claimed that it may take an extensive period of time to combat the outbreak of Covid-19, and hence it is salient for the economy to continue its economic growth to avoid a severe unprecedented economic crisis. Thus, the government decided to enhance economic activity by injecting money into the economy. Furthermore, the government of India also aspires to make India and reduce its economic dependency to avoid any vulnerability to the economy (in terms of relying on imports) during times of exogenous shocks. The injection into the economy may be controversial, and may not bring out the expected outcome for the economy. There are numerous theories and ideas which indicate that such a fiscal stimulus can have negative effects on the India economy. Fi...

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 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...