by Lekha Chakraborty and Harikrishnan S

As the Reserve Bank of India Governor Shri Shaktikanta Das puts it upfront, these are extraordinary times, and we need to respond with “whatever it takes” to deal with the pandemic. Over the past few days, our hope for systematically “flattening the curve” by containing the COVID-19 pandemic and moving to a quick V-shaped or U-shaped recovery is waning[i]. Evidence is increasingly pointing towards the situation worsening to a dual crisis — a public health crisis and a macroeconomic crisis — like never before.

The IMF projections substantiate that the drag of the pandemic on global growth could be to the extent of -3%. This is a major revision in the global growth rate over a very short period of time. The IMF highlighted that “the Great Lockdown is the worst economic disruption since Great Depression, and far worse than the global financial crisis,” and its estimates suggest that “the cumulative loss to global GDP over 2020 and 2021 from the effects of the COVID19 pandemic would be around $9 trillion, greater than the economies of Japan and Germany combined.”[ii] *(The IMF has since released its latest [June 2020] estimates, showing global growth declining 4.9 percent, for a cumulative, 2020-21 loss of $12 trillion.)

How have the central banks responded to this crisis?  This is evidently uncharted territory for the central banks — how to deal with “life versus livelihood” issues. The pandemic economics of central banks is twofold. One is the focus on measures that relate to instantaneous economic “firefighting”: for instance, how to ensure liquidity infusion into the system to stabilize the market reactions. The second is the long-term policy imperatives. As this crisis is of an unprecedented scale, it calls for unprecedented policy responses. continue reading…

I have translated this eulogy on behalf of the Economics Institute of the Federal University of Rio de Janeiro, where I have spent many of my years of economic formation. Carlos Lessa is part of a generation of brilliant Brazilian economists that have shaped the public debate and the discipline in Brazil. This is an effort to pay homage and make more visible the work and life of scholars whose writings are hardly ever translated into English but who are extremely important to our education.

This Friday June 5th at dawn, Carlos Lessa, Professor Emeritus of the Institute of Economics and former Rector of the Federal University of Rio de Janeiro (UFRJ) has passed away. This is a time of mourning for our community. Lessa was a brilliant professor and for several decades has been systematically considered by students as the best in class. As an intellectual, he was a big interpreter of Brazil and especially of Rio de Janeiro, a city that for him was the epitome of what is best and worst in our country . In addition to his many classes, he was a man of his time and a brilliant speaker, known for his very influential and extremely popular talks and speeches. His hundreds of lectures, from a world before the existence of the internet, are of immeasurable importance and impact, particularly in the most difficult years of our history, during the military dictatorship regime, when the circulation of information was often restricted by the fear and action of censorship. continue reading…

by Ana Luíza Matos de Oliveira

Brazil is a highly unequal country — so is the access to its higher education system. However, in the beginning of the 21st century (2001-2015), there was a convergence between the profile of Brazilian higher education students and the Brazilian population in terms of income, race, and region, although many inequalities still exist. Now, this process might be at risk.

From 2001 to 2015, economic growth and improvements in the labor market affected families’ spending decisions. Also, the budget for higher education presented significant growth and many programs aiming at democratizing access to higher education in Brazil — such as Reuni (expansion of the federal higher education system), Prouni (offer of scholarships in private institutions), loan schemes for students, affirmative action, and student assistance — were created or broadened. Policies in partnership with the private sector were put in place and are related to a significant growth in enrollment in private institutions in this period.

This led to greater social inclusion in higher education, as Graph 1 demonstrates.[1] It is also important to state that during this period there was a policy of increasing the value of the minimum wage (MW), which in 2020 is now R$ 1045 (USD 205).

Graph 1 – Students in Higher Education according to per capita income – Brazil (2001-2015)

Source: A. L. M. Oliveira (2019)

Graph 2 shows a rising trend of participation in higher education among people from the bottom 70% of the Brazilian income distribution (per capita family income) and a decrease in participation among the richest 30%. However, there is a sign of reversal in 2015.[2] continue reading…

by Harikrishnan S and Lekha Chakraborty

As predictable as it can be, the Indian Prime Minister announced lockdown at 8 PM on March 24th 2020, giving the country and its 1.3 billion people all of four hours to get ready, evoking memories of the demonetisation announcement and the midnight launch of the GST! This was done by invoking the National Disaster Management Act of 2005. While many analysts lauded the communication strategy of the leader “directly” speaking to the people as political decisiveness, our contention is that it was a clear case of using a “command and control” strategy instead of co-operative federalism, which the government had been taking pains to highlight that it believed in. The manner in which we are getting out of the lockdown, with an ad hoc and arbitrary exit strategy, at a time when the number of COVID cases reported daily has seen a mountainous surge (almost every other day previous records are being broken), shows a clear lack of any sort of planning and sadly reeks of cluelessness.

While the obvious intent of the lockdown policy was “to flatten the curve” and control the spread of the pandemic, almost irreversible economic disruption has resulted in many sectors and a mounting humanitarian crisis through the unprecedented exodus of migrant labour is staring at us with all its severity. continue reading…