Talking Macro With Prof. Parchure

Dr. Parchure is the officiating director at the Gokhale Institute of Politics and Economics, where I work. He was also my guide during my PhD saga (there is no other word for it), and has forgotten more macroeconomics than I will ever learn.

Tomorrow, at some point of time, I and Dr. Parchure will be sitting down – at our respective homes, of course – for a chat about what India can do when it comes to macroeconomic policy after the worst of the corona virus lock-down is over.

First things first: health comes first, and that’s a non-negotiable. There’s no version of this story in which we can discuss trade-offs about “getting things back to normal” so that “the economy isn’t destroyed”.

As Russ Roberts puts it:

So we’ll be talking tomorrow about an as yet unspecified date in the future, where India might not be as mobile and social as she was before, but not as locked-down as she is right now. But when that day comes, what should macroeconomic policy look like?

Here are two articles that I will be basing this discussion on:

  1. Ira Dugal’s take on India’s monetary policy.
  2. Ananth Narayan’s take on India’s fiscal policy.

Please read both, and don’t worry if you don’t get some details. Just power through both write-ups regardless.

Here are some aspects that I will definitely be asking questions about tomorrow:

  • The advisability of giving a monetary and fiscal stimulus: everybody seems to be taking it as a given (myself included). But is there a case to be made for limiting it, if at all?
  • That out of the way, should both fiscal and monetary policy be wheeled out simultaneously? Either ways, why?
  • What are the major tools in the monetary policy toolbox? Which of them will give the most bang for the buck? Which should we be holding back for later, and why? What mistakes should we be guarding against?
  • Ditto for fiscal policy.
  • What would Keynes have advised? I have this book in mind when I ask this question.
  • What episodes, in 20th century macroeconomic history, have parallels we can learn from? If there are none, are current macroeconomic models good enough to handle such scenario? If not, how might they be updated?
  • If you, Dr. Parchure, were in charge of things – interpret that as you being given carte blanche to handle India’s economy, no questions asked – what would you do? What are the political realities that in reality will stop some of these solutions from being implemented?

I’ll be sharing this blog post with Dr. Parchure, but in the meantime, if you have any questions that I have missed, please let me know in the comments, or email me.

The conversation will be up on YouTube tomorrow at some point of time.

Stay home, stay safe!

Mental health amid these times

A student of mine from Gokhale Institute sent me this email (lightly edited for clarity):

Hello Sir,

I just watched your videos related to Coronavirus.

They are great and helpful, somehow they leave the viewer feeling a bit optimistic.

However, I’d also suggest you to (I’m not sure if it’s actually needed or it’s something which you haven’t talked about implicitly) talk about the psychological drainage that this situation is creating. This situation actually looks like a flickering bulb, a very scary prospect indeed.

Amidst all this, people are panicking some loudly like my mother and some internally like me. And, it looks like a weird situation.

I mean I presume that even if we control the virus just like China has flattened its curve, we can only rest if the last case is eliminated of the virus which is closer to an impossibility. Sorry for sounding pessimistic but that’s how my mind is working at the  moment.

I also am allowing myself to think that maybe the virus will spread everywhere and act like an elimination round. It sounds brutal but looks like a possibility and the prospect of that happening does make me sad. I think humans will have to naturally cope up with this phenomenon and artificial measures would only aim at minimizing misery but do we actually look like we stand a chance at minimizing this loss?

What’s your take on the mentally distorting effects of the virus? Because, it’s not even slow poison it looks like an apocalyptic situation right now. And, if you could give some sense of hope to people like me – viewers and readers of your works.

Ayushi Baloni
Gokhale Institute of Politics and Economics

It’s a question that other people will also have, I’m guessing, which is why the reply is here, rather than directly to Ayushi.

This is from Nature Asia:

A mental health institute at the Second Xiangya Hospital in Hunan, China followed a protocol for ensuring the quality of life of those in isolation. The steps were simple – daily digital communication with their closed ones, group counselling, catering to individual dietary needs, comfort and leisure, continuation of job-related activities and updates on the outbreak condition. Weekly supportive psychotherapy sessions and periodic hygienic measures were ensured for healthy living. These helped preserve the dignity of those in isolation and their compliance to restrictive protocols. In the absence of such care giving, we often see people defy isolation or abscond for the fear of getting ‘stranded’, which is a larger menace to public health.

Setting up a goal for yourself: creating a list of tasks which should be completed has been helpful for some folks, myself included. That, along with making sure that I call at least one friend on a daily basis, usually more.

But speaking of tasks, as my friend Girish says here, don’t beat yourself up if you can’t complete the task. Half the fun is in drawing up the list! Read the rest of the post as well: great advice in there.

Do not be overly self-critical or disappointed if you make a list of things you can achieve in lockdown and end up completing none. Making lists is a soothing exercise and our mind’s way of trying to make sense and seek order in the surrounding chaos. We are also in the initial phases of the isolation so the need to change our habits and tackle self-improvement lists will not kick in without enormous struggle and discipline. The longer our lives are affected by the virus, the better the chances we’ll actually get around to the simple full-body workout, the basic cooking hacks, cleaning up behind the fridge or heck, showering every day.

The WHO has a video up about this issue as well:

Some advice from the NYT:

When he feels anxiety seep in, Dr. Hanson, who creates guided meditations for the digital platform Simple Habit, said he takes a few slow, deep breaths and reminds himself of what is true in this exact moment. Then he takes stock, telling himself, “In this moment, your heart is beating. You’re breathing in this moment. No saber-tooth tiger is coming after you in this moment.”

“Our fear is about the future. It’s what we anticipate,” he said. “But if you stop and say, ‘I am healthy in this moment,’ it pulls you out of rumination and anxious, helpless preoccupation. Your brain will come to this moment of quiet realization. ‘Things are not great, but they’re basically OK. I am still surviving.’ It gives you more of a sense of agency.”

Calm is an app available on both Android and iOS, designed to help you meditate, and headspace is another. There are plenty more, of course – no reason for you to stick to just these two! Tara Brach has guided meditations that are free, if that helps. Feel free to add more sources in the comments below, of course. Help others!

Speaking of helping others, I cannot recommend this strongly enough. Become a mentor to somebody. Teach a kid the alphabet, teach somebody how to cook, teach somebody something that you are good at. Personally, I find this very helpful indeed.

Read this, from BrainPickings – and read as much as you can of BrainPickings!

Hope — and the wise, effective action that can spring from it — is the counterweight to the heavy sense of our own fragility. It is a continual negotiation between optimism and despair, a continual negation of cynicism and naïveté. We hope precisely because we are aware that terrible outcomes are always possible and often probable, but that the choices we make can impact the outcomes.

Who can you follow on Twitter?

My recommendations would be Dr. Bhooshan Shukla, and Dr. Soumitra Pathare. I’m sure there are others, please provide references in the comments, or email me. I’ll update this post.

India Today says switching off is important:

According to author and mental health advocate Shuchi Singh, it is important that one does not give in to the hysteria that may be created by constant updates about the disease.

“The panic around novel coronavirus is primarily because of the bombardment of news everywhere, you can’t escape it. You don’t need to stay in touch constantly, need to know what’s a good balance between staying connected and not. You should follow precautions in your own way,” she says.

And finally, The Guardian channels its inner Douglas Adams, and tells us not to panic:

Yes, this virus is obviously a massive challenge: medical, political and – perhaps most strikingly at present – social and economic. But it is worth remembering the world has never had better tools to fight it, and that if we are infected, we are unlikely to die from it.

Thanks for reading, and please keep your questions coming!

Ayushi, thank you for your question! 🙂

Mythbusting from the WHO

The Indian National Science Academy recently came up with some mythbusters. Anoop and Asawari, friends of mine, were kind enough to share this with me – putting up the link here.

Posting the graphics from that page here. Please, share this information far and wide. Thank you.