Volume 22: Article 9

Assessing Impacts of Bangladesh Government’s Covid-19 Stimulus Package on Economy using Keynesian Expenditure Multiplier

Tasneema Afrin*
Abu Sumaiya**

Abstract: COVID-19 pandemic is taking a toll on every space and sector of our global and national life. In addition to being life threatening in nature, it has been proved disastrous to the economy. It is being compared nowadays as much as, if not equal, with the Great Depression from the last century. To soothe the economy, everyone has turned to one proven macroeconomic solution, Keynesian Economics of Expenditure. So did the government of Bangladesh. To save the people and the highly RMG dependent economy from the grasp of recession, the government has already declared a stimulus package over Tk. 1.0 trillion, which accounts for 3.7% of our GDP. Even though Keynesian economics is not a perfect path to solve the economic problems, it is an effective way for such a highly uncertain period. Of course without a wisely devised economic plan, it might bounce back in long term. But as people don’t eat in the long run, they eat everyday; the COVID-19 stimulus package by Bangladesh government might be the only ride for now, if managed effectively, to get out of this bearish economic situation.

Keywords: COVID 19, Keynesian Economics, Stimulus Package, Crowding out.

* Assistant Professor, IBA, University of Dhaka, Email: tasneema@iba-du.edu

** Assistant Manager (Operations), Biman Bangladesh Airlines Ltd.
E-mail: abusumaiya053.buet@gmail.com