Article;
Price-rise Weakness in Government Record Concrete Steps will be taken in Next Financial Year
Comment;
You know Mr. Prime
Minister your government has pushed growth so hard that unemployment rate fell
below its natural rate after which inflation started ticking up and is almost
persistent. And the many rounds of price hike of petroleum products has worsen
the inflation scenario. We as a economist should not entertain policies that
push unemployment rate below its natural rate (5%, frictional unemployment)...
Article;
RBI Governor Subbarao may not Oblige with a Rate Cut of 50 Basis Points- Economists
Comment;
RBI is doing
what needs to be done but the government with an economist as head does not
know about the limits of growth. Growth can not be pushed above a certain rate
if unemployment rate falls below its natural rate at 5%. Also called the NAIRU
i.e., non accelerating inflation rate of unemployment. above which inflation is
nearly dead and below which inflation starts rising. Its time for the
government to increase income-tax to control aggregate demand. But i think the
government will try to present a populist budget because elections are next
year...
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