"How so? Usually, in large economies, the gross value added (GVA) per worker and gross value added per capita of population tend to move together. In most developing countries (like Vietnam), GVA per worker comfortably exceeds GVA per capita. Since the 1980s, India has mostly fit this pattern.
However, that changed from 2018 onwards, where GVA per capita actually exceeded GVA per worker. What that means is that our employed workers are producing little, pulling the per worker average down. Meanwhile, GVA per capita held up because a larger section of the population began working, while not necessarily being more productive."
Quite revealing!
One could say that the mere increase in GVA per capita could be a direct result of fall in GVA per worker because lets say in a household one person's salary is no longer enough, so others have to chip in and do part time work (not high paying but helping meet ends nonetheless).
As I read ahead, I realised that this point is already called out in the article, albeit more subtly:
"The authors believe that this looks more like a distress response than an opportunity response. When male earnings in a household stagnate or fall, additional members enter paid work to stabilise income. **The household deploys more labour because it has to, not because better jobs have opened up.**"
What I was expecting is a dumbed down version for ease of understanding.
The deeper point the first story in the article is circling without fully stating:
Private banks behaved rationally as commercial entities and PSBs behaved rationally as policy vehicles. Neither was making purely bad decisions given their respective institutional contexts.
The crisis was the predictable output of using commercial bank balance sheets to pursue policy goals without any mechanism to compensate or protect those balance sheets from the policy risk they were absorbing.
Private banks opted out of that burden when they could. PSBs couldn't opt out because opting out "was" the policy (the PPP policy) failure.
Banks investing in infrastructure bonds with no credit rating is wild☠️☠️, while its our savings money which are invested in a no credit rating bond☠️☠️..
"How so? Usually, in large economies, the gross value added (GVA) per worker and gross value added per capita of population tend to move together. In most developing countries (like Vietnam), GVA per worker comfortably exceeds GVA per capita. Since the 1980s, India has mostly fit this pattern.
However, that changed from 2018 onwards, where GVA per capita actually exceeded GVA per worker. What that means is that our employed workers are producing little, pulling the per worker average down. Meanwhile, GVA per capita held up because a larger section of the population began working, while not necessarily being more productive."
Quite revealing!
One could say that the mere increase in GVA per capita could be a direct result of fall in GVA per worker because lets say in a household one person's salary is no longer enough, so others have to chip in and do part time work (not high paying but helping meet ends nonetheless).
That's another plausible way to look at it. This changes them as being categorised as a worker.
As I read ahead, I realised that this point is already called out in the article, albeit more subtly:
"The authors believe that this looks more like a distress response than an opportunity response. When male earnings in a household stagnate or fall, additional members enter paid work to stabilise income. **The household deploys more labour because it has to, not because better jobs have opened up.**"
What I was expecting is a dumbed down version for ease of understanding.
Feedback taken!
The deeper point the first story in the article is circling without fully stating:
Private banks behaved rationally as commercial entities and PSBs behaved rationally as policy vehicles. Neither was making purely bad decisions given their respective institutional contexts.
The crisis was the predictable output of using commercial bank balance sheets to pursue policy goals without any mechanism to compensate or protect those balance sheets from the policy risk they were absorbing.
Private banks opted out of that burden when they could. PSBs couldn't opt out because opting out "was" the policy (the PPP policy) failure.
Very well put!
Banks investing in infrastructure bonds with no credit rating is wild☠️☠️, while its our savings money which are invested in a no credit rating bond☠️☠️..