What the article goes on to say is that government is thinking of having Rs 4000 CR fund to fight inflation. My understanding of macro economic is very limited, but if I remember correctly, inflation occurs when there is a surplus money supply in the economy. Isn't the government doing just that, without any addition of product or services, just adding money which will further drive up the prices? On a similar note, how much impact did the multi billion dollar bail out of US financial institutions have on global inflation
2 comments:
dude,
chk this -
http://www.business-standard.com/india/storypage.php?autono=330487
I suppose to the question to ask in the case of US is what would have happened if there was NOT a bailout ?? :-) or a more expensive one than that orchestrated
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