Wednesday, June 20, 2012

Can’t outsource to RBI

.....But that said, what are we to make of the policy? Rate cuts cannot, as RBI argues, raise GDP growth if the problems are structural or if there is, to use the common catchall phrase, ‘policy paralysis’. But rate hikes make viable projects unviable by lowering project IRRs and, by the same logic, rate cuts make them viable........

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