It Takes Two to Tango: Can monetary stimulus compensate for an inadequate fiscal stimulus in India? Parthapratim Pal and Partha Ray

Monetary policy can only make credit cheaper, it cannot bring money into the hands of workers. It cannot compensate for a fiscal stimuli, especially when India is in a  liquidity trap. For such an unprecedented crisis, fiscal spending has been highly inadequate.

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(The authors are with Indian Institute of Management Calcutta, Kolkata; they may be contacted at parthapal@gmail.com and pray@iimcal.ac.in, respectively)