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India covid-19 economy crisis shock India

Opinion | The covid shock could alter people’s financial priorities

India covid-19 economy crisis shock
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We should expect Indians to increase their precautionary savings over time to come in response to income volatility today Will the financial choices of Indian households change in the years ahead, well after the covid-19 shock dissipates?

And how will they change? The answers to these two questions have immense implications on public policy choices right now. Economists usually believe that there are two ways households react to income volatility of the sort we are seeing right now.

They borrow to protect consumption levels in case they expect the income shock to be temporary. They increase savings to meet wealth targets in case they expect he income shock to be permanent.

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Deaths: 750 423
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India
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Deaths: 141 607
Recovered: 0
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Deaths: 237 619
Recovered: 0
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