In my last article, I had argued that despite the drop of 0.25 per cent in the repo rate, real interest rates in India still seem too high, limiting the actual output (and job creation) below its potential. I was pleasantly surprised to see economist Helene Rey emphasising the equivalence between output loss and high real rates in her Andrew Crockett Memorial Lecture last month — “The Global Financial System, the Real Rate of Interest and a Long History of Boom-Bust Cycles”. In it, she quoted Larry Summers’ argument that “we had entered into an age of ‘secular stagnation’, that
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
