Print More Money

Esther Duflo and Abhijit Banerjee explain why Direct Benefit Transfers are the best way forward. 

Esther Duflo and Abhijit Banerjee have advocated making large direct benefit transfers to Indians. They believe:

This is important both in order to make social distancing and lockdown effective and in order to stop the economy from going into a tailspin. 

Aggressive macro economic measures need to be taken to make this happen. 

India should just print more money and transfer it to people most in need.

Some of this can be transferred now with an assurance that the rest of it will follow in the future. 

India need not worry about devaluing the rupee as a result of this because oil prices are low globally.

India also need not worry too much about our ratings coming down as a result of aggressive macro economic policy because it is unlikely to default on loans. 

Here are two reports on this:

https://www.telegraphindia.com/business/abhijit-banerjee-offers-print-money-pill/cid/1763262

https://www.business-standard.com/article/economy-policy/quantitative-easing-direct-benefit-transfer-need-of-the-hour-economists-120040801431_1.html

NB: In this report, Jean Dreze points to the limitations of DBTs.

Esther Duflo and Abhijit Banerjee are Nobel laureates in Economics and professors at the Massachusetts Institute of Technology

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