Paradox of a supply constrained keynesian equilibrium the COVID-19 case
Economic and Political Weekly
The Indian economy, which was facing demand deficiency and slowdown prior to the Covid-19 outbreak, plunged further with the lockdown. The present exercise represents the current problem as a typical demand constrained Keynesian equilibrium, afflicted further by demand and supply failures generated by transaction costs. The resulting scenario resembles a “supply constrained” Keynesian equilibrium. The article looks at the possible impact on prices and discusses the implications of select policy interventions for such an economy.
Dasgupta, Dipankar and Rajeev, Meenakshi, "Paradox of a supply constrained keynesian equilibrium the COVID-19 case" (2020). Journal Articles. 294.