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<ul class="summary-list"><li>S&amp;P 500, Nasdaq, and Dow fell in August amid recession fears and market pullbacks.</li><li>Key concerns include Federal Reserve rates, US-China consumer spending, AI trade, and geopolitics.</li></ul>The second half of 2024 has thrown some curveballs. August rang in a pullback as the <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/spdr_s_p_500_etf_trust_cert_deposito_arg_repr_005_sh-stock">S&amp;P 500</a> fell by 3.27%, the tech-heavy <a target="_blank" class="" href="https://markets.businessinsider.com/index/nasdaq_composite">Nasdaq</a> by 4.7%, and the <a target="_blank" class="" href="https://markets.businessinsider.com/index/dow_jones">Dow</a> by 3.7%.Despite the indexes in the red, Joe Quinlan, head of CIO Market Strategy for Merrill and Bank of America Private Bank, says what scares him the most is <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/are-we-in-a-recession">recessionary fears </a>creating a self-fulfilling prophecy as investors scare themselves out of the market and into spending halts.Six key concerns are tugging at investors' minds right now, but each is unwarranted, according to Quinlan, who broke them down and shared his thoughts.The first concern is that the market is afraid the Federal Reserve is behind the curve on cutting interest rates after keeping them too high for too long. However, fears that this could lead to a recession are overblown. The economy is slowing, but it's not stalling, and the central bank is on track to cut two or three times this year, he noted."The employment market is so important because employment equals income, income equals consumption, and consumption is around 70% of US GDP," Quinlan said.But he noted that even as July's unemployment rate ticked up to 4.3%, it's still historically low and pretty strong relative to other countries.The second concern is that US and Chinese consumers are retrenching. While spending is slowing, what's really happening is that the consumer is normalizing. However, the squeeze of inflation is being felt, especially for lower-income households, he added. The impact will be felt in certain sectors more than others.More tightness could come from the Chinese consumer. China has been trying to reopen for the last 18 months, and it's not happening, he said. Plus, the Chinese property and equities markets are underwater, which has created a negative wealth effect. There's also a high unemployment rate among college graduates and a lack of jobs, he added."You could see some weakness in consumer staples, particularly consumer discretionary," Quinlan said. "You've seen the airlines add a lot of capacity, but the flyers aren't there. You see hotels having to maybe start discounting. You need to watch where the capacity or supply has been added, but the demand is not there, then you start discounting, which means lower profit margins going into Q3 and Q4. So that's kind of what we're watching out for."The third concern is the unwinding of the artificial intelligence trade, mainly the Magnificent Seven. Here, Quinlan noted that the pullback was to be expected and healthy as the sector got frothy.This earnings season was rich in guidance and uncovered key trends for Big Tech. One of these was the overarching theme of continuing to spend billions of dollars on AI infrastructure. The potential rate of return on all that capex has impatient investors questioning their bets. They want sooner returns, but the AI trade will take years, not quarters, he said.The fourth concern is the recent unwinding of the yen carry trade. Japan's low interest rates made its currency a cheap option to borrow and fund other trades in the US and worldwide.But those arbitraging the yen found themselves getting squeezed as the Japanese central bank raised rates. The unwinding process saw parts of the market, specifically tech, sell off as investors rushed to repay the loans. While no one knows where the bottom is, Quinlan believes the worst is over.The fifth concern is uncertainty surrounding the US election. At the beginning of the race, it seemed likely that Donald Trump would win.Polling predicted that the former president had a good lead, particularly in swing states. But that's off the table now, and we're right back to a tight race, Quinlan said. Increased uncertainty also means increased volatility. So there's $6 trillion sitting in money market funds that is being held hostage to politics, he added."I speak with clients every day. They're happy getting 5% out of the money market bonds until they see some clarity, more certainty in and around the election," Quinlan said. "They expect more volatility, particularly post-Labor Day, because it's going to get tight; it's going to get pretty interesting. Policies are going to be dissected."Quinlan emphasized that any significant stock market dips below 5% are buys.. He doesn't advise trying to time the market by selling with profit-taking intentions. One punishing day could be followed shortly after by some nice upside, he noted.The final concern is rising geopolitical tensions in the Middle East. For Quinlan, this has translated into a strategy of being long the leaders of US defense, aerospace, and cybersecurity.The escalating conflict between Israel and Iran ups the ante of a greater regional conflict that makes investors nervous, and defense is a key winner of that, he said.If investors want to skip the volatility that accompanies an uncertain economic environment, then one of the best places to park money is still in bonds with durations between two and 10 years, he said."We've had these episodes of market volatility in the past, and the only path was in and out of equities," Quinlan said. "Well, now you get 4% even on a two-year yield; that's a good place to put some money to work as you're waiting out this volatility. Remember, as interest rates come down, you lock in two-, five-, or 10-year yields. You're not locking in anything by owning cash. Those money market funds are going to come down as the interest rates come down."He also likes small-cap companies across the board. Even though the Russell 2000's rally in mid-July didn't last, he believes the sector will have its day. Smaller companies are more credit-sensitive. If you combine dropping rates with a soft landing, this sector of the stock market is well positioned for upside, he said."We're still believers in that small-cap trade. So don't give up on that if you don't have exposure, add to it," Quinlan said.

2 trades to make now amid 6 economic pitfalls ahead, according to a Bank of America chief strategist   

India is facing a "Great Slowdown" with its economy headed for intensive care unit primarily due to a "second wave" of the twin balance sheet crisis at banks, <keyword id="8462612" type="UNKNOWN" weightage="20" keywordseo="former-Chief-Economic-Adviser-Arvind-Subramanian">former Chief Economic Adviser Arvind Subramanian</keyword> has said. Subramanian, who was Modi government's first chief economic adviser but quit in August last year, in new paper co-authored with the former head of the International Monetary Fund's India office Josh Felman said India is facing a "Four Balance Sheet" challenge -- comprising banks, infrastructure, plus NBFCs and real estate companies -- and is trapped in an adverse interest growth dynamic. "Clearly, this is not an ordinary slowdown. It is India's Great Slowdown, where the economy seems headed for the intensive care unit," he wrote in a draft working paper of the <keyword id="97117" type="COMPANY" weightage="20" keywordseo="Harvard-University">Harvard University</keyword>'s Centre for International Development. Subramanian had flagged the twin balance sheet (TBS) problem - debt accumulated by private corporates becoming non-performing assets (NPA) of banks - back in December 2014, while he was CEA to the <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> government. In his new paper, he has made a distinction between the original TBS and "TBS-2".
 TBS-1 was about bank loans made to steel, power, and infrastructure sector companies during the investment boom of 2004-11 turning bad. TBS-2 is largely a post-demonetization phenomenon, involving non-banking financial companies (NBFCs) and real estate firms.
 "Since the Global Financial Crisis, India's long-term growth has slowed as the two engines propelling rapid growth -- investment and exports -- sputtered. Today, the other engine -- consumption -- has also stalled. As a result, growth has plummeted precipitously over the past few quarters," he wrote.
 India's GDP growth in the July-September quarter slowed to a six-year low of 4.5 per cent. This was the sixth consecutive quarter when the growth rate had fallen.
 "Indeed, the economy seems locked in a downward spiral," he said. "Best capturing this stark reality is the astonishingly high interest-growth differential. The corporate cost of borrowing now exceeds the GDP growth rate by more than 4 percentage points, meaning that interest on the debt is accumulating far faster than the revenues that companies are generating."
 This, he said, has caused "a resurgence in the amount of stressed debt, a second wave of the Balance Sheet Crisis".
 If this process is left unchecked, the economy will continue to spiral downward, as stress reduces growth, which then intensifies the stress, he said.
 "Clearly, action must be taken to stabilize the economy and get it back on the path of rapid growth," he said. "But in the current circumstances, the standard macroeconomic tools are not very useful. There are actions that the government cannot do (further significant fiscal stimulus); must not do (reducing personal income tax rates or raising GST rates); can do with only limited effectiveness (easing monetary policy)."
 According to Subramanian, first major action -- almost a pre-condition for righting the economy -- could be a Data Big Bang, which instill confidence and produce a reliable basis for policy making.
 "This must comprise the publication of unreleased reports together with a strategy for improving official statistics in at least three areas: the real sector (GDP, consumption, and employment), fiscal accounts, and stressed assets in the banking system," he said.
 Next, a new asset quality review to cover banks and NBFCs must be conducted. Also changes to the Insolvency and Bankruptcy Code (IBC) be made to ensure that participants actually have incentives to solve the problem.
 He also advocated the creation of two executive-led public sector asset restructuring companies (bad banks), one each for the real estate and power sectors, while at the same time strengthening oversight, especially of NBFCs. Recapitalization of banks should be linked to resolution and reforms such as shrinking public sector banking should be undertaken.
 "There is, of course, a reason why these policies have not been implemented before. They are politically difficult and other, easier alternatives have seemed more attractive. But, the government currently has a tremendous amount of political capital. And by now all the alternatives have been tried and found wanting. So, finally, after a long and difficult decade, the government has both the opportunity and the clear need to resolve the Four Balance Sheet (FBS) problem," he said.
 Dwelling into the current problem facing the economy, he said, after demonetization, considerable amounts of cash made their way to banks, who on-lent a major part of that to NBFCs. The NBFCs, in turn, channelled this money to the real estate sector. By 2017-18, NBFCs were accounting for roughly half of the estimated Rs 5 lakh crore of outstanding real estate loans.
 The collapse of IL&amp;FS in September 2018 was a "seismic event" not only because of the Rs 90,000 crore-plus debts of the infrastructure-cum-lending behemoth, but also its "prompting markets to wake up and reassess the entire NBFC sector," he said.
 What the markets discovered was profoundly disturbing. A lot of NBFC lending in the recent period was concentrated in one particular industry -- real estate -- which itself was in a precarious situation.
 The current slowdown, the paper says, is worrisome not just because GDP growth has slowed down to 4.5 per cent in the second quarter of 2019-20. Even more distressing is the disaggregated data.
 "The growth of consumer goods production has virtually ground to a halt; production of investment goods is falling. Indicators of exports, imports, and government revenues are all close to negative territory," it said. "These indicators suggest the economy's illness is severe, unusually so. In fact, if one compares the indicators for the first seven months of this year with two previous episodes, the current slowdown seems closer to the 1991 slowdown than the 2000-02 recession."
 Electricity generation figures suggest an even grimmer diagnosis: growth is feeble, worse than it was in 1991 or indeed at any other point in the past three decades, it added. ANZ ANZ BAL
BAL

India facing 'Great Slowdown', economy headed to ICU: Modi govt's 1st CEA Subramanian

<ul class="summary-list"><li><keyword id="11909347" type="UNKNOWN" weightage="60" keywordseo="putin" source="Orion">Putin</keyword>'s former chief economic adviser said the number of <keyword id="13374014" type="UNKNOWN" weightage="60" keywordseo="russians" source="Orion">Russians</keyword> in <keyword id="11964087" type="UNKNOWN" weightage="60" keywordseo="poverty" source="Orion">poverty</keyword> could triple in the wake of the <keyword id="11985141" type="UNKNOWN" weightage="60" keywordseo="ukraine" source="Orion">Ukraine</keyword> <keyword id="11904994" type="UNKNOWN" weightage="60" keywordseo="war" source="Orion">war</keyword>.</li><li>Andrei Illarionov told the BBC that Putin was more concerned about his territorial ambitions than the livelihoods of Russians.</li></ul>The number of Russians living in poverty will probably double and could even triple in the wake of the Ukraine war, President <keyword id="11899444" type="UNKNOWN" weightage="60" keywordseo="vladimir-putin" source="Orion">Vladimir Putin</keyword>'s former chief economic adviser has said.Nearly 19 million Russians live in poverty, <a href="https://databank.worldbank.org/data/download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_RUS.pdf">according to the World Bank</a>. In an interview with the BBC's <a href="https://www.bbc.co.uk/iplayer/episode/m0016s00/talking-business-09042022">Talking Business</a> program, Andrei Illarionov, who served Putin between 2000 and 2005, said: "We'll see probably doubling the number of those people, maybe even tripling."He said Putin's territorial and imperial ambitions "are much more important than anything else, including livelihoods of Russian population."Putin seemed to be "completely not interested" in economics or living standards for Russians, Illarionov added.Illarionov said the resources of <keyword id="11894337" type="UNKNOWN" weightage="60" keywordseo="russia" source="Orion">Russia</keyword>'s public and private sectors "to increase or even to sustain the income of the population is actually pretty limited."Putin pledged in 2018 to halve the number of Russians living below the poverty line.Illarionov told the BBC: "It is absolutely impossible to have any positive future for Russia with the current political regime."He said there was "no way" that Russia "might be integrated back into the international relations, in the world <keyword id="11893570" type="UNKNOWN" weightage="60" keywordseo="economy" source="Orion">economy</keyword>."Although <a href="https://www.businessinsider.com/russias-ruble-rebound-explained-capital-controls-sanctions-economy-currency-ukraine-2022-4">Russia's ruble has rebounded to where it was</a> before the Ukraine invasion, the country's economy remains in a perilous state.The Institute of International Finance expects <a href="https://www.businessinsider.com/russia-economy-gdp-crash-ukraine-war-inflation-sanctions-energy-putin-2022-3">Russia's economy to shrink 15% this year</a>, wiping out 15 years of growth.The Centre for Strategic Research, a Moscow-based think tank, <a href="https://www.csr.ru/ru/publications/rynok-truda-v-novykh-ekonomicheskikh-usloviyakh/">estimated</a> on April 1 that two million jobs could be lost in Russia this year as unemployment rates rise.The impact of sanctions and the exit of Western companies, including <a href="https://www.businessinsider.com/mcdonalds-closing-russia-locations-during-conflict-2022-3">McDonald's</a> and <a href="https://www.businessinsider.com/goldman-sachs-pulls-out-of-russia-ukraine-invasion-2022-3">Goldman Sachs</a>, could cut the supply of goods and services in Russia. Economists have said that Russians may face inflation of 20% or more by the end of the year, <a href="https://www.businessinsider.com/russia-economy-gdp-crash-ukraine-war-inflation-sanctions-energy-putin-2022-3">Insider</a> previously reported.

Putin's former chief economic adviser says the number of Russians living in poverty will probably double, maybe triple, in the wake of the Ukraine war

<ul class="summary-list"><li>Andrei Illarionov, <keyword id="11909347" type="UNKNOWN" weightage="60" keywordseo="putin" source="Orion">Putin</keyword>'s former chief economic adviser, was interviewed by the BBC.</li><li>He said Putin would likely halt the <keyword id="11985141" type="UNKNOWN" weightage="60" keywordseo="ukraine" source="Orion">Ukraine</keyword> war if the West stopped buying Russian <keyword id="11896879" type="UNKNOWN" weightage="60" keywordseo="oil" source="Orion">oil</keyword> and <keyword id="11955852" type="UNKNOWN" weightage="60" keywordseo="gas" source="Orion">gas</keyword>.</li></ul>Vladimir Putin's former chief economic adviser has suggested that Russia would halt military operations in Ukraine "within a month or two" if Western countries stopped buying Russian oil and gas.In an interview with the BBC's <a href="https://www.bbc.co.uk/iplayer/episode/m0016s00/talking-business-09042022">Talking Business</a> program, published Sunday, <a href="https://centerforsecuritypolicy.org/author/andrei-illarionov/">Andrei Illarionov</a>, who advised Putin between 2000 and 2005, said the president was likely reassured by a continuing steady flow of <keyword id="11917806" type="UNKNOWN" weightage="100" keywordseo="energy" source="Orion">energy</keyword> export revenue, which was allowing him to continue the war.Illarionov said that if Western countries implemented "a real embargo on oil and gas exports from Russia," then "within a month or two, Russian military operations in Ukraine probably will be ceased." He added: "It's one of the very effective instruments still in the possession of the Western countries."Russia's economy is <a href="https://www.businessinsider.com/russia-economy-gdp-crash-ukraine-war-inflation-sanctions-energy-putin-2022-3">forecast</a> to shrink by as much as 15% this year after Western nations imposed sweeping <keyword id="12754126" type="UNKNOWN" weightage="60" keywordseo="sanctions" source="Orion">sanctions</keyword> and companies pulled out of the country in the wake of its invasion of Ukraine.Illarionov predicted Russia would be spared complete economic devastation thanks to its strength with exports – particularly energy exports.Exports account for <a href="https://wits.worldbank.org/countrysnapshot/en/RUSSIA/textview#:~:text=RUSSIA%2C%20Exports%20of%20goods%20and,percentage%20of%20GDP%20is%2028.54%20%25.">more than</a> a quarter of Russia's economy, with the country a heavyweight exporter of oil, gas, precious metals, and grain. The International Energy Agency <a href="https://www.iea.org/reports/a-10-point-plan-to-reduce-the-european-unions-reliance-on-russian-natural-gas">estimates</a> that Russia accounts for 45% of the European Union's gas imports, and the bloc says it receives most of its oil from Russia. Illarionov told the BBC: "Every two and a half days, a billion euros comes into Putin's pockets. That's extremely helpful for Putin to continue to keep his system running, to continue to finance the war."Illarionov added: "Once this currency flow is interrupted, Putin will have to rethink his policies because he won't have much resources to finance further aggression."EU countries have pledged to wean themselves off Russian energy and the US has promised to export more liquefied natural gas to members of the bloc. However, the high prices of <a href="https://markets.businessinsider.com/commodities/oil-price?type=wti">oil</a> and <a href="https://markets.businessinsider.com/commodities/natural-gas-price">natural gas</a> mean Russia's income from energy exports could rise by more than a third in 2022 compared with 2021, <a href="https://www.bloomberg.com/news/articles/2022-04-01/putin-may-collect-321-billion-windfall-if-oil-gas-keep-flowing?sref=lAVQtUwz">according</a> to Bloomberg Economics.

Putin's former chief economic adviser says Russia would likely halt the Ukraine war 'within a month or two' if the West slapped a full embargo on Russian oil and gas

After attacking <a href="http://www.businessinsider.in/searchresult.cms?query=raghuram+rajan&amp;sortorder=effectivedate">RBI Governor Raghuram Rajan</a>, who confirmed he will not go for second term, BJP MP <a href="http://www.businessinsider.in/searchresult.cms?query=subramanian+swamy&amp;sortorder=effectivedate">Subramanian Swamy</a> now has a new target. 
 Now, he wants India’s Chief Economic Adviser <keyword id="6355547" type="PERSON" weightage="20" keywordseo="Arvind-Subramanian">Arvind Subramanian</keyword>, a PM Narendra Modi-appointee, to be sacked. 
 
Swamy claimed that Subramanian had recommended that the US government act against India through the <a href="http://www.businessinsider.in/searchresult.cms?query=WTO&amp;sortorder=effectivedate">WTO</a> over its pharmaceutical IPR regulations. 
 
In a series of tweets, Swamy alleged that Subramanian encouraged Congress to remain adamant on <a href="http://www.businessinsider.in/searchresult.cms?query=GST&amp;sortorder=effectivedate">GST</a> clauses. Swamy said he was helping Finance Minister Arun Jaitley in identifying his enemies. 
 
<blockquote class="twitter-tweet" data-lang="en">
	
		Who said to US Cong on 13/3/13 the US should act against India to defend US Pharmaceuticals interests? Arvind Subramanian MoF !! Sack him!!! — <keyword id="6370187" type="PERSON" weightage="20" keywordseo="Subramanian-Swamy">Subramanian Swamy</keyword> (@Swamy39) <a href="https://twitter.com/Swamy39/status/745429777234825216">June 22, 2016</a></blockquote>
 
 
<blockquote class="twitter-tweet" data-lang="en">
	
		Guess who encouraged Congi to become rigid on GST clauses ? Jaitely's economic adviser Arvind Subramanian of Washington DC
	— Subramanian Swamy (@Swamy39) <a href="https://twitter.com/Swamy39/status/745439703013302273">June 22, 2016</a></blockquote>
 
 
<blockquote class="twitter-tweet" data-lang="en">
	
		Now PTs can understand why our core economic sectors could not perform last two years. Trojan horses galore in MoF/ Fin Institutions
	— Subramanian Swamy (@Swamy39) <a href="https://twitter.com/Swamy39/status/745466119461314563">June 22, 2016</a></blockquote>
 
 
<blockquote class="twitter-tweet" data-lang="en">
	
		<a href="https://twitter.com/omsinghis">@omsinghis</a> : I am helping Jaitely to recognise the enemies in our camp.
	— Subramanian Swamy (@Swamy39) <a href="https://twitter.com/Swamy39/status/745478227594883072">June 22, 2016</a></blockquote>
 
Subramanian had made that recommendation to the US Congress in a written testimony, which was submitted in March. 
Also, he had sought changes in Indian patent law. 
 
"If India does not address the problems created by Section 3(d) of the patent legislation or by compulsory licensing for nonworking, the United States should consider initiating WTO disputes against India," read Subramanian's testimony to the US Congress. 
 
Earlier, Swamy had accused Rajan on anti-national intentions. 
 
READ ALSO: <a href="http://www.businessinsider.in/Swamysays-Raghuram-Rajan-is-leaking-secrets-and-defending-US-power-gives-Modi-6reasons-to-sack-him/articleshow/52450672.cms">Swamy says Raghuram Rajan is leaking secrets and defending US’ power, gives Modi 6 reasons to sack him</a> 
 
READ ALSO: <a href="http://www.businessinsider.in/Subramanian-Swamy-is-stepping-up-the-political-ladder-and-how/articleshow/52850894.cms">Subramanian Swamy is stepping up the political ladder and how</a>

Subramanian Swamy now wants India’s chief economic adviser to be sacked

(Photo Source : flickr.com) <ul><li>The Indian government is said to be considering <keyword id="6354424" type="COMPANY" weightage="20" keywordseo="world-bank">World Bank</keyword> lead economist <keyword id="172342" type="PERSON" weightage="20" keywordseo="Poonam-Gupta">Poonam Gupta</keyword> for the role of Chief Economic Advisor (CEA). </li><li>The position became vacant after <keyword id="6355547" type="PERSON" weightage="20" keywordseo="arvind-subramanian">Arvind Subramanian</keyword> left the role months before his term was to expire . </li><li>A government search committee is said to be looking at other candidates as well. </li></ul> The Indian government is said to be considering World Bank Lead Economist Poonam Gupta to fill the role of Chief Economic Advisor (CEA), Economic Times reported. If confirmed, Gupta would become the first woman to hold the position. Prior to joining World Bank in 2013, Gupta was <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank Of India</keyword> Chair Professor at National Institute of Public Finance and Policy. The government’s search committee is also said to be considering other names including Sajjid Chinoy, chief India economist at JPMorgan, and Krishnamurthy Subramanian, a professor at the Indian School of Business. India is seeking to fill the position after the abrupt resignation of Arvind Subramanian who left several months before his tenure as the government’s Chief Economic Advisor was to expire. Subramanian reportedly left because of “<a href="https://www.facebook.com/notes/arun-jaitley/thank-you-arvind/804077679780782/">pressing family commitments</a>.” He had been appointed as the CEA to the India’s finance ministry in October 2014. Even though there are only six months remaining for the upcoming general elections, the Indian government has been looking for a ‘fresh face’ to seek expert advice amid global turmoil, according to the report. The Finance Ministry <a href="https://economictimes.indiatimes.com/news/economy/policy/government-likely-to-appoint-new-chief-economic-advisor-in-next-1-2-months/articleshow/66281908.cms">appointed</a> a search committee in October headed by former Reserve <keyword id="6355303" type="DOMAIN" weightage="20" keywordseo="bank-of-india">Bank of India</keyword> governor <keyword id="90390" type="PERSON" weightage="20" keywordseo="Bimal-Jalan">Bimal Jalan</keyword>, who has been asked to shortlist suitable candidates.

India could soon have its first woman Chief Economic Advisor: Report

New Delhi, Jan 31 () India's GDP growth is neither overestimated nor underestimated and the concerns on data are "unfounded", the Economic Survey 2019-20 said on Friday as it tried to settle the debate over veracity of the macroeconomic data following change in estimation methodology. Recently, <keyword id="6355547" type="PERSON" weightage="20" keywordseo="arvind-subramanian">Arvind Subramanian</keyword>, the <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> government's former chief economic adviser, had said India's economic growth rate has been overestimated by around 2.5 percentage points between 2011-12 and 2016-17 due to a change in methodology for calculating GDP. India's <keyword id="6354971" type="DEFINITION" weightage="20" keywordseo="gross-domestic-product">gross domestic product</keyword> (GDP) growth rate between this period should be about 4.5 per cent instead of the official estimate of close to 7 per cent, he had said in a research paper published at Harvard University. The Economic Survey tabled in Parliament on Friday said the level and growth of a country's GDP informs several critical policy initiatives as it is a barometer of the economy's size and health.
 "It is also a pre-eminent driver of investment. Therefore, it is important that GDP is measured as accurately as possible," it said.
 The survey notes that the recent debate and discussion among scholars, policymakers and citizens alike about India's GDP growth rates following the revision in GDP estimation methodology in 2011 assumes significance, especially given the recent slowdown.
 Using careful statistical and econometric analysis that "does justice" to the importance of the issue, the Survey in a dedicated chapter said it has found no evidence of mis-estimation of India's GDP growth.
 It said that cross-country comparisons are fraught with risks of incorrect inference due to various confounding factors that stem from such inherent differences.
 As a result, cross-country analysis has to be carefully undertaken so that correlation is distinguished from causality.
 The models that incorrectly overestimate GDP growth by 2.77 per cent for India post-2011 also mis-estimate GDP growth over the same time period for 51 other countries out of 95 nations in the sample, it said.
 However, when the models are estimated correctly by accounting for all unobserved differences among countries as well as the differential trends in GDP growth across countries, growth for most of these 52 countries (including India) is neither over- nor underestimated.
 "In sum, concerns of over-estimation of India's GDP are unfounded," it said.
 It further said the need to invest in ramping up India's statistical infrastructure is undoubted.
 In this context, setting up of a 28-member Standing Committee on <keyword id="1112111" type="COMPANY" weightage="20" keywordseo="economic-statistics">Economic Statistics</keyword> (SCES) headed by India's former chief statistician is important, it said. Nevertheless, carefully constructed evidence in the Survey must be taken on board when assessing the quality of Indian data, said the survey tabled in Parliament by Finance Minister Nirmala Sitharaman a day before she presents the Union Budget. NKD CS ABM

India's GDP growth neither over- nor underestimated, says Eco Survey

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Drew Angerer/Getty images Former national economic council director Gay Cohen. </div></div></div><ul class="summary-list"><li>Former National Economic Council director Gary Cohn is working on a memoir chronicling his career, both in and out of the White House, according to a CNBC report.</li><li>Cohn reportedly has not yet found a publisher.</li><li>"I'm writing about my time in Washington already," Cohn said to Bloomberg in August 2018. "Look, I rewrote tax reform, which hadn't been done in 31 years. I've been talking into my tape recorder lots and lots ... of hours."</li></ul>Former National Economic Council director Gary Cohn is working on a memoir of his career, both in and out of the White House, according to a CNBC <a href="https://www.cnbc.com/2019/02/27/gary-cohn-writing-memoir-of-career-including-trump-white-house-tenure.html">report</a> Tuesday.The former chief economics adviser and Goldman Sachs chief operating officer has begun writing the memoir but has not yet found a publisher, sources familiar with Cohn said to CNBC.Cohn previously teased the memoir in a <a href="https://www.bloomberg.com/news/articles/2018-08-06/gary-cohn-is-happy-in-the-hamptons-golfing-and-crypto-investing">Bloomberg</a> profile written after his resignation from the White House."I'm writing about my time in Washington already," Cohn said to Bloomberg in August 2018. "Look, I rewrote tax reform, which hadn't been done in 31 years. I've been talking into my tape recorder lots and lots ... of hours.""I'm afraid when I listen to it it might be the same thing 35 times," he added. "But I'm going to give someone literally thousands of hours of tape."Cohn announced his <a href="https://www.businessinsider.com/gary-cohn-resigns-2017-8">resignation</a> in March 2018 and was replaced by Larry Kudlow, CNBC's conservative commentator. His signature policy includes the overhaul of the US tax-code, which Republicans claim was the largest since 1986.Cohn's departure was reportedly hastened after his failure to persuade Trump on softening his stance against <a href="https://www.businessinsider.com/gary-cohn-white-house-push-to-end-trump-tariffs-trade-war-2018-3">tariffs</a> on steel and aluminum imports - a tax that Cohn believed would damage the US economy and hurt trade relations with key allies."It has been an honor to serve my country and enact pro-growth economic policies to benefit the American people, in particular the passage of historic tax reform," Cohn said in a statement at the time. "I am grateful to the President for giving me this opportunity and wish him and the Administration great success in the future."Cohn joins a long list of former Trump administration officials who have published memoirs of their experience at the White House.Former White House communications aide Cliff Sims is the latest former official to publish a memoir of his time in the Trump campaign and White House. Like many other books written by former Trump staffers, Sims' memoir, "Team of Vipers: My 500 Extraordinary Days in the Trump White House," details several <a href="https://www.businessinsider.com/cliff-sims-trump-fires-off-tweets-all-hours-no-advance-notice-2019-1">unflattering anecdotes</a> during his time in Trump's orbit. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/michael-cohen-trump-explosive-claims-house-oversight-committee-2019-2">'He is a racist. He is a conman.' Michael Cohen's most explosive claims about Trump in his blockbuster hearing</a></h3> <div> </div> </div>

Trump's former chief economic adviser Gary Cohn is reportedly writing a memoir

New Delhi, Dec 20 () Former Chief Economic Adviser Arvind Subramanian on Friday said there is no space for expansionary fiscal policy and opined against reducing personal income tax rate.
 "...no space to have expansionary fiscal policy. There's a lot of talk about personal income tax cut and raising GST rates, and I would be categorically against the both, we do not have the space," he said at an event here.
 Subramanian further said that he thinks personal income tax cuts motivated by desired increased consumption are highly inequitable.
 Any cut in personal income tax, he said, will benefit the only top 5-7 per cent people, who are actual taxpayers.
 "So if you want to boost consumption it has to be something much more, which actually reaches much poorer people. It has to be some kind of DBT (direct benefit transfer) or universal basic income (UBI)," he said.
 Reminding that all the countries that are developed have more number of tax payers in their respective systems, he said adding that it is beneficial in the long term.
 While on the other hand opposing GST rates hike, the former CEA said that it will affect the consumption and a slowdown or a recession is not the time to be embarking on (such options).
 "You can't have too much expansionary fiscal policy but equally you can't be crunching government demand at a time when the economy is weak and in stress," he added.
 India's economic growth fell to the lowest in more than 6 years at 4.5 per cent during the second quarter ended September of the current fiscal due to slowing demand as well as fall in output, exports among others. In the first quarter ended June of 2019-20, the economy grew by 5 per cent, which was the lowest in six years.
 On the GST front, the government earlier this week fixed a uniform tax rate of 28 per cent on both state and private lotteries, which is to come to effect from March 2020.
 In the previous various meetings of the GST Council, the government has cut the rates on various services and goods, amidst GST collections remaining below expectations, with an aim to boost demand.
 Amid concerns that the government may fall short of tax collection target in a slowing economy, the government has set an ambitious Rs 1.1 trillion monthly GST target for the remaining four months of the current fiscal and asked taxmen to step up efforts to achieve the goal. KPM MKJ

No space for expansionary fiscal policy: Ex-CEA Arvind Subramanian

<div class="KonaFilter image-container display-table"><div><div class="image on-image">REUTERS/Jonathan ErnstWhite House Council of Economic Advisers Chairman Austan Goolsbee gestures as he addresses the 2010 meeting of the Wall Street Journal CEO Council in Washington, November 16, 2010</div></div></div><ul><li>The US economy has maintained a similar growth rate under President Donald Trump as it did under Barack Obama, showing the presidency's limited short-run impact.</li><li>In an interview with Business Insider, ex-Obama economic adviser Austan Goolsbee says this stability shows all the complaints about "uncertainty" under Obama were misplaced.</li><li>Goolsbee says Trump's proposed infrastructure plan "doesn't go anywhere" because he's spent all his political capital on tax cuts for the rich. </li></ul> One of the biggest gripes from business and CEOs under the administration of President Barack Obama was that "policy uncertainty" was hampering corporate decision making.Yet under President Donald Trump, arguably the most volatile leader in modern US history, the economy has continued to coast along at a similar pace.That's despite the president's own threats to start a trade war with key partners like China and Mexico, to let the healthcare system fall apart after his failure to repeal Obamacare, and constant threats of conflict with North Korea. I asked Austan Goolsbee, former chief economic advisor to President Barack Obama, what he makes of the recent economic stability in the face of deep political uncertainty.He said it "mostly shows that the arguments about the negative impact of uncertainty were really just a different way to label a dislike of Obama."Below is a lightly edited transcript of <a href="http://www.businessinsider.com/obama-adviser-austan-goolsbee-says-economy-resilient-not-spectacular-2017-12">our Q&amp;A with Goolsbee</a>, now a professor at the University of Chicago:Pedro da Costa: Are you surprised at how steady the economy has remained despite the arguably unprecedented levels of political uncertainty that come along with a Trump administration? Austan Goolsbee: A little but I always remind folks that 90+% of economic growth has nothing to do with the government. I think this mostly shows that the arguments about the negative impact of uncertainty were really just a different way to label a dislike of Obama. We've definitely seen moments where political dysfunction can bleed over into markets or consumer confidence (for example, the original debt ceiling fight), but basically the economy has been chugging along for about seven years in a row as has the stock market despite lots of political ups and downs.da Costa: What is your biggest fear about the Trump economic agenda? Goolsbee: Absent geopolitical crises, the role of government policy isn't as big as people think in the short run. In the immediate term, the potential to ignite an escalating trade war without really intending to ought to be high on our list of US dangers as should dangers of popping credit bubbles either internationally or here at home. Inequality getting exacerbated by cutting taxes for high-income people seems inevitable at this point. The disregard of ethical boundaries and debasing of the White House just makes me sad.da Costa: What happens with infrastructure? Goolsbee: I think it doesn't go anywhere. New presidents get a year or so to do anything, and I think they've used it up. Maybe they can pass a tax cut to close out that year but past that, the Democrats do not trust the President's word in negotiations (i.e., believe if he agrees to something, he later just backs out and says he never agreed) and the infrastructure plan was rooted in having the federal government spend less money on infrastructure and instead to privatize and turn things over to states or private companies. Is there any common ground? If the tax bill passes and we start looking at annual deficits of 4.5% of GDP or $900 billion to $1 trillion annually when not in recession, I just don't see where there will be any room to do infrastructure. da Costa: What is it with Democrats whining about deficits when they should know to <a href="http://www.businessinsider.com/democrats-attacking-trump-tax-plan-on-deficits-picking-wrong-argument-2017-11">focus on more relevant issues with the Trump tax cuts</a>, and given that it will hurt them politically in the future by giving Republicans ammo? Or do you think I'm barking up the wrong tree? Goolsbee: Sort of. It's pretty unbelievable that the party in control of both houses of Congress and the White House would propose a tax bill that raises taxes on the middle class and make Congress vote on it. I never would have thought that would happen. But you can't completely forget about the deficit otherwise the proponents of the tax bill would just cut taxes by $5 trillion and whenever someone complained, just cut taxes for them, too. <div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Thomson ReutersTrump departs the White House in Washington</div></div></div>I don't think I fully agree with your future-ammo point in that Washington seems to have become completely inured to flip-flopping. Seriously, these same people proposing a $1.5 trillion tax cut (which is really $2.5 trillion+ without the accounting tricks) when the economy is already growing 2.5-3% condemned Obama for a $0.8 trillion stimulus when we were in the middle of the deepest downturn in 75 years and desperate for expansion. That didn't seem to give any useable "ammo" to the debate now. da Costa: What's your outlook for the economy over the next year? Do you think the Fed will really be able to continue hiking rates or is growth still too shaky to handle both higher rates and a smaller balance sheet? Is the labor market as close to full employment as the headline number suggests, in your view? Goolsbee: My forecast is decent but not spectacular, very similar to the last six years, and that makes me think that the Fed won't be able to hike rates as much as they think they will. They have undershot their inflation target quarter after quarter, year after year and the fear is that it may have undermined the Fed's credibility a bit. Now when the Fed says they are just about to the 2% target or that they are afraid of rapid inflation, many look at the forecasts from each of the last 32 quarters and say 'didn't you say that five, four, three, two years, even one year ago, too?' The full employment question is tougher to answer. You remember that not long ago, the market was saying that 6.5% unemployment rate was full employment. It's gone down and down without wages going up. Job creation has slowed this year compared to last despite GDP growth being slightly higher so maybe we are finally running out of people but no one really knows why we don't see too rapidly increasing wages if there is a labor shortage. Let's hope things start improving on the wage front but no one should feel too comfortable until you actually see it. Predictions of imminent changes have just cried fire too many times. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/this-is-why-you-should-be-buying-gold-2017-11">This is why you should be buying gold</a></h3> <div> </div> </div>

Obama's former chief economic adviser tells us what is really going on in the economy

India’s ruling party <keyword id="14666" type="ORGANIZATION" weightage="100" keywordseo="BJP">BJP</keyword> tried to steer away from giving an appropriate reaction to all the slurs that senior party leader <keyword id="6370187" type="PERSON" weightage="100" keywordseo="Subramanian-Swamy">Subramanian Swamy</keyword> hurled against Narendra Modi government's chief economic advisor (CEA) <keyword id="6355547" type="PERSON" weightage="100" keywordseo="Arvind-Subramanian">Arvind Subramanian</keyword>. 
 
Here is what Swamy had tweeted about Arvind Subramanian: 
 
 
<blockquote class="twitter-tweet" data-lang="en">
	
		Who said to US Cong on 13/3/13 the US should act against India to defend US Pharmaceuticals interests? Arvind Subramanian MoF !! Sack him!!!
	— Subramanian Swamy (@Swamy39) <a href="https://twitter.com/Swamy39/status/745429777234825216">June 22, 2016</a></blockquote>

<blockquote class="twitter-tweet" data-lang="en">
	
		Guess who encouraged Congi to become rigid on GST clauses ? Jaitely's economic adviser Arvind Subramanian of Washington DC
	— Subramanian Swamy (@Swamy39) <a href="https://twitter.com/Swamy39/status/745439703013302273">June 22, 2016</a></blockquote>
The BJP, however, stayed away from commenting on his public disapproval by calling it as his personal opinion. 
 
"That's his opinion. We do not have to say anything," BJP spokesperson Gopal Krishna Agarwal told <a href="http://economictimes.indiatimes.com/news/politics-and-nation/bjp-fumbles-over-swamys-attack-on-modi-governments-chief-economic-advisor/articleshow/52865205.cms">ET</a>. 
 
"This is his statement. You can ask him, he is an MP. Party has nothing to say on this," Agarwal added. 
 Party leaders struggled to exude confidence in what was called his "individual opinion," because of the credibility that Swamy has attained after his public attack on RBI Governor <keyword id="6358908" type="PERSON" weightage="100" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword>. 
 
<a href="https://i.ytimg.com/vi/ehibLNo6J2k/maxresdefault.jpg">Image source</a>

BJP tries to steer away from Swamy's slurs against Modi’s chief economic advisor

<ul class="summary-list"><li>The UK's slow response to the coronavirus pandemic cost lives, according to the country's former chief scientific adviser.</li><li>"Why we didn't respond so much sooner once this epidemic broke out in China, I simply don't know," Professor Sir David King told LBC Radio.</li><li>He said a decade's worth of UK government cuts to public services had exacerbated the crisis.</li><li>The UK government denies acting too slowly to lock down the country.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>The UK government's failure to act "much sooner" to tackle the coronavirus pandemic caused a significantly higher death toll in the country, according to the country's former chief scientific adviser.Professor Sir David King told <a href="https://www.lbc.co.uk/">LBC Radio</a> on Wednesday said that Boris Johnson's government should have acted as soon as the outbreak began in China."Why we didn't respond so much sooner once this epidemic broke out in China, I simply don't know," Sir David, who advised the UK government between 2000 and 2007, said."And I say this because, in 2006, we published a report on actions needed to deal with a pandemic and in that report, we showed that if an outbreak occurred of any new virus of this kind, anywhere in the world, within three months, due to air travel, it would be everywhere in the world and that, of course, is what has happened - and it seems that we were unprepared and we didn't take action."King pointed to <a href="https://www.independent.co.uk/sport/racing/coronavirus-deaths-uk-cases-ap-mccoy-cheltenham-festival-a9462321.html">pictures of crowds attending the Cheltenham horse races</a> in the middle of March, despite the virus rapidly spreading across the country."Imagine, 16th March, having a horse race go on with a massive crowd at Cheltenham," he said."We didn't manage this until too late and every day's delay has resulted in further deaths in the United Kingdom."King said government cuts to public services over the past decade had exacerbated the slow response to the crisis."I think it really is very difficult because it goes right back to 2010, when the government came in with a very clear policy to reduce public spending across the board, including the National Health Service and I'm afraid these austerity measures did lead to the cutting back on the risk management programmes," he said."And clearly this also managed to cause problems with flooding across the UK. We were much better prepared for better spending for the Environment Agency on that and equally unprepared for pandemics. For me, this is very upsetting because we had set this preparation process in place, as I say, back in 2006."Asked if the cuts had led directly to more deaths in the UK he replied "Absolutely. That is what I'm saying."The UK government has denied acting too late in tackling the crisis compared to other countries with lower death tolls.Asked by <a href="https://www.youtube.com/watch?v=UHTbbtm_rms">Business Insider on Monday</a> whether the government's response had cost lives, the First Secretary of State Dominic Raab replied that "I don't think those comparisons are like-for-like because of where we are on the curve... and the individual circumstances in those countries, but we will continue to monitor what is going on in those countries."<h2>Watch Dominic Raab defend the UK's response to the coronavirus</h2>Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please email <a href="mailto:covidtips@businessinsider.com">covidtips@businessinsider.com</a> and tell us your story.Get the latest <a href="/coronavirus-business-impact">coronavirus business &amp; economic impact analysis</a> from Business Insider Intelligence on how COVID-19 is affecting industries.

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