Rich Economics, Poor

Economics
By
Dr Atiq ur Rehman
First International Conference on Philosophy of Social Sciences
ARID Agricultural University, Islamabad
December 20-21, 2022
The Covid-19 and US Economy
US debt to GDP ratio
Money Supply in US during Covid 19
And for Pakistan!!!
Budget and Debt to GDP for Italy
Inflation in Italy
 Italian Covid-19 relief package
• € 400 billion worth of loan guarantee
• € 250 billion direct relief measures
• Interest rate = 0%
 Inflation Targeting
• It is basically demand management strategy
• Current wave of inflation is due to international commodities
• Small countries cannot effect global demand
• Pakistan has 0.3% share in world GDP
• No need for Pakistan to target inflation
• But we are forced to target it with 16% PR when PR in US is
4%
Stiglitz on Inflation Targeting

Joseph E Stiglitz
Nobel Prize in Economic
Sciences, 2001
Fiscal History of Pakistan
 Consumption Versus Austerity
• After covid-19, there were consumption support program
everywhere in the world
• E.g. UK pledged to pay 80% of the salaries of every furloughed
worker
• German covid relief package reached 35% of GDP, three times
a normal budget
• But we are forced to cut subsidies, increase prices and reduce
government subsidies
Budget 2022-23 for Pakistan
Budget Breakup
 Austerity Kills!
• My income goes down
•  I will purchase less
•  retailer will lose income
•  wholesaler will lose income
•  producer will suffer
•  worker will suffer
• Many times reduction in income
 Keynesian Remedy for Recession
• Pay people to dig holes in ground, than pay to fill them up
• Means consume without so called economic feasibility
• Labor will get income, it will transfer to retailer, wholesaler,
producer and than to labor again
• This is what they do in their own countries
• But we are forced to austerity
• The policies where we should follow advanced economies are
prohibited for us
• And where we shouldn’t follow them, are imposed on US
Thank You