Budget 2020 needs a Fiscal Operation Twist to balance short-term growth revival with long-term disicipline
A Fiscal Operation Twist may be a formula to get there with enhanced spending in some areas and a clear will to tighten the belt elsewhere.
Fiscal stimuli flatter to deceive. It does help in pushing up economic growth initially, but ends up creating more problems
Manmohan Singh's demonetisation speech in Rajya Sabha gave validity to his detractors' claims that he is an 'overrated economist and underrated politician'.
The tragedy is that there seems to have been no change in the thought process of those who are in decision making positions.
In a scenario where consumers decided to save more the money would land up in banks. Banks would suddenly have more money, leading to lower interest rates. Lower interest rates would mean that businesses would borrow and invest more.
Keynesian economic theories go wild as Paul Krugman reasons that a war with space aliens is just the kind of economic stimulus the US needs.