Article;
Interest-rates may come down without Raghuram Rajan's help.
Comment;
If interest rate goes down private demand would kick-in...
good for industries... High government borrowing crowds out private
borrowing... Both public and private spending can boost growth but the public
sector is constrained by deficit target and there is no such binding with the
private sector they can spend higher can push growth higher... Just like the
Central bank, a lender of last resort... the government should be a spender of
last resort... The government should fill the gaps where market becomes
inefficient... as in case of public goods... The government spends when it puts
tax somewhere, because it is its revenue... This is why private spending is
preferred over public spending... Nevertheless inflation remains a problem and
restricts higher growth rates...
No comments:
Post a Comment