Department of Economics, UCSC

These essays were written as columns for the Financial Express daily newspaper in India. This collection begins in December 2019, so technically the first two pieces were not written in the “Year of Coronavirus.” But they provide a good starting point. The collection ends in December 2020: there are 26 essays in all. All of these pieces appeared in the Financial Express, in print and online, with varying lags from the dates of writing, which are noted after each essay. The newspaper versions invariably had different, more elaborate titles, but the ones below are my original, somewhat spare, title choices. I hope that reading these pieces in sequence and together will provide a consistent and useful perspective on Indian economic policy in a year that has been truly extraordinary. I have not changed any of the text, so these represent my real-time and evolving understandings of India’s situation over this period. Many of the essays are about the response to the pandemic, so they focus on non-economic aspects of policy but the economic implications are, I would like to think, always in the analysis. Two of the essays focus on the US – its pandemic response and its presidential election – neither is about India’s policies at all, but each has, I hope, some lessons for India.

The need to monitor aggregate financial stability was made clear during the global financial crisis of 2008-2009, and, of course, the need to monitor individual financial firms from a microprudential standpoint remains. However, linkages between financial firms cannot be observed or measured easily. In this paper, we propose a procedure that generates measures of connectedness between individual firms and for the system as a whole based on information observed only at the firm level; i.e., no explicit linkages are observed. We show how bank outcome variables of interest can be decomposed, including with mixed-frequency models, for how network analysis to measure connectedness across firms. We construct two such measures: one based on a decomposition of bank stock returns, the other based on a decomposition of their quarterly return on assets. Network analysis of these decompositions produces measures that could be of use in financial stability monitoring as well as the analysis of individual firms' linkages.