Is Economy = Stock Markets?
Sit through any debate or discussion about the economy and you cannot miss this argument. Indian economy is strong and that is corroborated by a surging stock market. Does this association distract us - and policy makers - from larger issues of economic development?
I think title should be changed..it is definitely not equal to "="....it seems like comparing apples and oranges
stock market is more a result of the perceived economy and also for short timeframe
Again the economy here encompasses so many things.."demand,supply of goods(internal n external), currency, policies(fiscal n monetary) etc"
stock market shouldnt be yardstick to measure our development..cos there cld be a situation where stock market might get rocked but the country still develops..that depends on the policies..an example- fiscal deficit of a country is closely monitored by foriegn investors..to make investment decisions..now if the fiscal deficit goes up..it could be perceived bad by them and they might revert their investments causing stockmarkets to tumble down.... whereas the same fd could help the country develop its infrastructure and increase its future production capacities..so the country develops..
Thank you, Bikram and "Unknown". Your points are valid, though in the case of the United States, fiscal deficit does not seem to have done it - or its currency - much harm as traditional economics would dictate. But let's not digress.
Let's expand the debate a bit to put this on the floor - is then the left of center path of economic growth the right one for a country like India? That is, how does economic policy and the barometers it sets up, align itself to not measure how much richer the rich are getting (stock markets mostly favor the well heeled because of its access and information asymmetry) but measure the trickle-down. Or, is trickle down the right way - or should it be replaced by direct intervention in the less priviledged strata of the society?
Keep your comments coming.
Subrata sorry to say.. that was quite broad question..could you narrow down to a point..cos It should not be like we say something and and the whole discussion goes in one direction from one of the manythings..and anotehr suggestion..dont change the topic of debate/discussion so soon..cos not many have responded .. give it some time..
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