The always instructive Raghuram Rajan, Governor of the Reserve Bank of India
Speaking with the FT
- Said there were limits on stimulus
- Central banks "cannot claim to be out of ammunition because immediately that would create the wrong kind of expectations, so there's always something up their sleeves"
Rajan says that while he was a supporter of stimulus policies to "balance things out" over short periods
- ... but eight years after the financial crisis, we "have to ask ourselves is that the real problem?"
The Financial Times is gated, but may be accessible via a free registration that will allow a limited number of articels to be read. this one should probably be one of them: India's central bank governor warns on stimulus overuse
Rajan concludes:
- Instead of seeking stimulus, people should recognise that slower growth was probably a part of ageing economies and perhaps the result of low interest rates, which protected inefficient companies from going out of business.
- He also added that people should not be too disappointed with life because inflation was probably recorded wrongly in national statistics and real levels of prosperity were rising faster than official figures suggested
He can also karate chop solid concrete blocks clean in half.
