tag:blogger.com,1999:blog-19649274.post9041072457279795133..comments2024-03-27T17:16:12.789+05:30Comments on The Leap Blog: Fighting back inflation is cheaper when there is credibility: A numerical exampleAjay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-19649274.post-22798243266017055282011-10-29T08:38:44.749+05:302011-10-29T08:38:44.749+05:30Sir, the central theme of your post is that ultima...Sir, the central theme of your post is that ultimately the monetary policy will counter inflation but at a cost of GDP ..<br /><br />I fail to understand that how price control can be effected successfully if :<br />1) we don't have reliable data(as you also mentioned)<br />2) there is so much fiscal slippage and leakage all the time in our country.<br />3) The credit market - bond-Currency- Derivative link does not work because of low confidence in government initiatives( i mean the transmission does not take place that well)<br />4) growing earning population of India which means demand will not subside for a long time , it will come up again and again resulting in repeat of the inflation cycle.<br /><br />I agree that increasing interest rate will ultimately raise the price of money but will it really check inflation? Therefore will rate hike ultimately rein in inflation by controlling the price of tradables and non tradables ???<br /><br />If yes , kindly suggest how..and if I am wrong in my understanding kindly correct me..<br /><br />With Kind Regards<br /><br />Rahul Krishna<br />IIM Lucknow<br />9936067100Rahul Krishnahttps://www.blogger.com/profile/12550827598772161631noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-41060735784694195742011-10-25T15:11:50.597+05:302011-10-25T15:11:50.597+05:30GOI and RBI saved real estate companies during 200...GOI and RBI saved real estate companies during 2008 by restructuring their loans. This keeps the asset price bubble in the system. Common man never understood why GOI and RBI did this. This also leads to wage price spiral. In any case, common man does not believe wpi inflation, as they have found that realized inflation is more than 15%. RBI baby steps is not going to help.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-86800035637012178052011-10-23T01:23:03.587+05:302011-10-23T01:23:03.587+05:30Need your help for two things
1) Won't high in...Need your help for two things<br />1) Won't high interest rates merely replace bank finance with FDI as FII's will borrow abroad and invest here to exploit interest rate arbitrage?<br />2) What is the best way to short GOI bonds over a period greater than 1 year?valueinvestor2010https://www.blogger.com/profile/05498499726687143903noreply@blogger.com