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    Policy in a post pandemic world

    Policy in a post pandemic world

    29 September 2023 Global macro
    We ask Raghuram Rajam, former Chief Economist and Director of Research at the International Monetary Fund and Former Governor of the Reserve Bank of India, to share his thoughts on some of the issues facing the world as it slowly emerges from the pandemic.

    Executive summary

    China’s policy dilemma

    • Strengthening reforms has created new problems
    • China is enacting a carefully worded shift towards greater distribution of growth
    • Taiwan is probably not a concern in the short-term

    Developing countries have taken a backward step

    • An inability to work from home has been a major problem
    • Inequality has increased
    • It will be harder to promote fiscal discipline in the future

    Developed markets have fared far better

    • Service economies have allowed richer economies to outperform
    • But pandemic driven fiscal expansions mean debt is now a major concern
    • There are four approaches to bring debt downwards, but none are attractive
    • Central banks have effectively become a prisoner to markets

    The unfairness of climate change policy

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