A Case For A Corona Bond
( The following article appeared on CNBC TV18 online on September 24, 2020, per link below: https://www.cnbctv18.com/market/bonds/view-should-government-be-thinking-of-a-corona-bond-to-fund-fiscal-deficit-7002821.htm ) A Case for a Corona Bond In the current Covid-19 context, with sharply lower tax collections on the one hand and the need for increased relief and eventually recovery spending on the other, the government has no choice but to run large fiscal deficits for some time. In this note, we present a case for the government to fund some of this deficit by directly borrowing from savers through a special Corona bond, rather than from banks. We suggest that such a bond would help the cause of financial stability, by offering a reasonable alternative to savers, and by curbing the possibility of unwelcome inflation down the road. Money Supply - Trends Even as the economy takes a body through Covid-19, our money supply is registering robust growth. To recap, money supply “M