Shapes of Economic Recovery
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.