Governments across the world are grappling to put their respective economies on track after prolonged period of lockdowns and/ curbs on movement of its citizens. A V-shaped recovery means there’s a sharp upturn after a quick decline, and a U-shaped one implies there could be months, even years, between decline and a pickup. W-shaped recovery, which is also called a “double dip”, means the economy picks up only to fall again and then starts rising, while an L-shaped recovery is characterised by a slow rate of recovery, with persistent unemployment and stagnant economic growth. And finally a K-shaped recovery is a situation where there’s a sharp divergence between different strata of society.
The economic situation may have been different 10 years ago but then finance minister Pranab Mukherjee’s remarks at the US-India CEO Forum in June 2010 are worth recalling with reference to the current economic uncertainty.
He had said: “Economists used to tell us last year that the global economy will make a V-shaped recovery … Recently, with the risk of new crises, experts are saying that it may be a W-shaped recovery. Frankly, I’m beginning to feel that for every (letter) in the English dictionary; there is a theory of economic recovery. What so many competing theories of recovery mean is that we really do not know the answer.”
It feels like world economies are going back to school and getting their alphabets right. It is now or never.
While the finance ministry says the recovery is V-shaped, most economists seeing growth in the context of seasonally adjusted quarter-on-quarter, it seems to be W-shaped if it comes in the next quarters. This is the most appropriate measure in the current times.
NPowersU Expert Opinion
The Central government of India and the economists can only predict how the economy will recover. But seeing the diversity, policies and politics involved within each state ruled by politicians governed by different ideologies, implementation of these policies is the key.
For example – Kollywood (Tamilnadu) and Sandalwood (Karnataka) film industry is doing better than Bollywood (Maharashtra) as cinema theatres are still shut in Maharashtra. This is leading to Theatre owners and employment related to the said industry suffering very badly. The list is endless.
Jokingly we can say that ‘All work and no cinema will make Jack and Jill a boring couple’
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