Economics, Econometrics and Finance
8 years ago

Lowering interest rates boosts Indian economy, spurring growth and investment.

Palgrave Macmillan UK eBooks
Effectiveness of Monetary Policy in India: The Interest Rate Pass-Through Channel
Ramkishen S. Rajan, Venkataramana Yanamandra

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The article discusses how monetary policy in India affects the economy through the interest rate channel. When the central bank lowers policy rates, it reduces the cost of funds in the economy, stimulating economic activity. A strong pass-through of these rate changes makes the transmission mechanism more efficient, helping the Reserve Bank of India achieve its objectives.