
Abhijit Vinayak
Banerjee(A Nobel laureate) has suggested a simple policy for India as its economy baffleed on the impact of the covid crisis: Printing money precisely and transfer
cash directly to the bank account of the poor families.
Banerjee suggested that third world countries such as India dont need to worry too much about macroeconomic & hyperinflation stability
and fiscal slippages and should do ‘whatever is good for its country man’ to help those who are
mostly affected by the economic shock that many fear might be greater and more
pervasive than the Great Depression of 1929.
coronavirus
Is it?
Lets find out
To understand just imagine a picture
of balance

Where in one side total country’s
GDP and in other total printed money. That’s means
TOTAL GDP VALUE = TOTAL PRINTED
MONEY.
And if this condition become unbalanced so we can definitely
found us in a inflation economic condition or deflection economic condition.
coronavirus
So lets brake down that :
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When a whole country tries to get richer
by printing more money, it rarely works. Because if everyone has more money,
prices go up instead. And people find they need more and more money to buy the
same amount of goods.
Take an example, suppose I recently
got huge money. So I went market to purchase everything what I dreamt in my
life. But hay not only I everyone has that dream. So I found a huge line in
malls. The owner of the mall think that hmm:
so demand , ok lets make the price very high. To
earn more profit.. when I entered that mall. WHAT I pad costs Rs 300000.

And I only have Rs 150000. So the
market became like Old once again.
coronavirus
Cause market make
every unbalence situation to balance.
Now you can say why
it worse situation every thing became like previous demand & supply.
NO,
NAVER,
coronavirus
· Worst senario .1
Cause earliar where
$1= Rs 72
Now it will be $1= Rs 72*(inflation %+100)%.
It may be Rs 90,
100,1000 or 100000 also.
So then import will be dengerously costly.
Or we can hardly
import.
coronavirus
· Worst senario .2
Earliar Rice per kg
was Rs 50
Now Rice per kg is Rs 150.
And if you see the price the verience to Rs 0
to Rs 50 is 50
NOW see the price the verience to Rs 0 to Rs 150
is 150.
In earliar
situation earning Rs 50 is more easiar than now where you have to earn Rs 150.
Cause this certain infalation can not effect immidiately or with exact
percentage in employee’s wage. So
definitely you will earn more than earliar situation but current wage value is
less than previous wage value.
WHAT ; you don’t belive
me , Ok see it in your eyes.
coronavirus
This happened
recently in Zimbabwe, in Africa, and in Venezuela, in South
America, when these countries printed more money to try to make their economies
grow.

As the printing presses
sped up, prices rose faster, until these countries started to suffer from
something called “hyperinflation”. That’s when prices rise by an amazing amount
in a year.
When Zimbabwe was hit by
hyperinflation, in 2008, prices rose as much as 231,000,000% in a single year.
Imagine, a sweet which cost one Zimbabwe dollar before the inflation would have
cost 231m Zimbabwean dollars a year later.
coronavirus
This amount of paper would
probably be worth more than the banknotes printed on it.
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