India's arduous exit from easy money policy4 min read 22 Feb 2022, 10:36 PM IST
Tobin’s policy-coordination model could be useful as we embark on the tricky task of pulling back fiscal and monetary support
The pandemic knocked down entire economies. In response, governments around the world opened the spending spigots while central banks pumped extra liquidity into financial systems. Such coordinated action is necessary during a crisis—as we saw in the aftermath of the North Atlantic financial crisis of 2008 as well. Two years later, as life limps back to normal and the worst economic impact of the pandemic is a receding memory, policymakers have to figure out how to reverse the decisions they took in early 2020. Many will struggle.
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