Jayati Ghosh’s Blog

This was never going to be an easy Union Budget to present for any finance minister, even before last week. Despite all the hype about a resurgent Indian economy, almost all the indicators that matter suggested that economic conditions were far from positive. The only big exception was the stock market, which had been performing well beyond anything that could be justified by actual earnings or immediate prospects. That was one of the indicators constantly trumpeted by the government’s official spokespersons, who suggested that this was an indication of the faith that domestic and foreign investors have in the potential…

Professor Jayati Ghosh is one of the world's most prominent living development economists and a Professor of Economics at the University of Massachusetts Amherst. Her voluminous research output spans gender perspectives on development, theories of economic growth, Indian macroeconomic policy, and environmental economics, among over 200 papers and 20 books. In 2022 she published Earth For All: A Survival Guide for Humanity, coauthored by the Club of Rome’s Transformational Economics Commission. In March 2022, she was appointed to the UN Secretary General’s High-Level Advisory Board on Effective Multilateralism, mandated to provide a vision for international cooperation to deal with current…

To mitigate the worst effects of climate change and prevent societal breakdown, we must shift to renewable energies and reduce extreme inequality. But doing so would require massive increases in public spending, which is why governments must overhaul their outdated and regressive tax systems. The World Economic Forum’s annual meeting in Davos, Switzerland, has always been more than a little problematic. But in recent years, the annual gathering of the rich and powerful has become an increasingly wasteful exercise in vanity. What is the point of all those private jets, luxury hotels, and clinking champagne glasses if they lead to…

In the 1920s and early 30s, John Maynard Keynes was embroiled in a controversy with the ‘austerians’ of his time, who believed that balancing the government budget, even in a time of economic volatility and decline and financial fragility, was necessary to restore ‘investor confidence’ and therefore provide stability. Keynes was horrified by the idea. Zachary Carter’s brilliant biography notes that Keynes felt a package of government spending cuts and tax increases would be ‘both futile and disastrous’. It would be an affront to social justice to ask teachers and the unemployed to carry the burden of deflating a doomed currency, in…

The Covid-19 pandemic highlighted the urgent need for a universal social protection floor—something that has been talked about and even internationally accepted for more than a decade now, but has still received relatively little serious attention from policy makers in most countries. The challenge is to ensure basic levels of food, health, income and livelihood security, not only in periods of crisis like the pandemic or economic shocks but also in the “normal” course of economies and societies. This has become a major concern because of the dramatically increased economic inequality and greater vulnerability of people to adverse events and…

The Russian invasion of Ukraine and the subsequent war sparked rapid and dramatic increases in some global trade prices, particularly for fuel products, wheat and fertilizer for which Russia and Ukraine are major exporters. It is now clear that these price changes were not due to actual changes in total supply, which remained largely unchanged (although source locations and trade routes shifted). Instead, market expectations amplified by media hype, financial speculation in commodity futures and simple profiteering by major fuel companies and agribusinesses, were probably the major factors. This is why these prices rose sharply from January until around June…

It was headline news when Chinese customs statistics at the end of September 2022 indicated that for a second calendar year, India’s trade with China would settle at well above $100 billion. That was only partly because of the positive implications of burgeoning trade between the two countries that only two years back were involved in clashes at the border at Galwan. The bilateral trade balance attracted attention because it reflected large imports from China into India, many multiples of India’s exports to China. Over the first nine months of 2022, China’s exports to India rose more than 30 per…

The monetary policies of the major advanced economies have been obsessively nationalist for more than two decades now, with hardly any genuine international cooperation beyond some coordination among G7 economies. These policies in turn have had all sorts of impacts—often very negative—in the rest of the world, and particularly in the low and middle income countries referred to collectively as emerging and developing economies (EMDEs). After the Global Financial Crisis, the advanced economies unleashed historically loose monetary policies, with major liquidity expansion and very low or even negative interest rates of their central banks. This enabled and encouraged massive increases…

It is well known that indirect taxes fall disproportionately on the poor, and therefore a tax regime that relies mostly on such taxes is both unjust and inefficient in terms of not mopping up the excess profits and incomes of large corporations and rich families. The Indian tax system has always been broadly regressive, with an inordinately high share of indirect taxes, even when compared to countries at similar levels of per capita income. But the extent to which this reliance has been accentuated during the Modi government are not fully appreciated. When combined with other regulatory measures and public…