Shapes of Economic Recovery 

#GS3 #Economy 

Economists just love graphs and those graphs have never been as cool. 

As practitioners of the dismal science plot possible recovery paths of Covid-hit economies, they have added new shapes to plain vanilla V or U trajectories. 

About the Background 

  • There’s the Swoosh, a recovery pattern that looks like Nike’s famous logo. There’s the smoking pipe graph. 
  • There’s a W, Z and an L. 
  • Entirely predictably, because they can never agree on anything that’s important, different economists are championing different shapes, including in India. 

About the Swoosh shape 

  • The Swoosh shape signifies that there will be sharp plunge, a longish stay below the trend line of growth and a gradual climb up. 
  • HDFC’s Abheek Barua thinks India is headed for Swoosh shape. 
  • But chief economic advisor KV Subramanian bets on a nice V — contraction, then sharp recovery. 
  • Barua bats for Swoosh by arguing that “lack of coordination among states, labour shortage and income declines” will hit both demand and supply. 
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