Question
Raghuram Rajan has argued: The industrial economies are using ultra-loose monetary policy, while the emerging markets are using currency intervention and capital controls. (...) The
Raghuram Rajan has argued: "The industrial economies are using ultra-loose monetary policy, while the emerging markets are using currency intervention and capital controls. (...) The tools they are using will create distortionsboth ultra-loose monetary policy and intervention risk creating excess liquidity and asset price bubbles. If capital is too cheap, we will tend to use it too much. If the exchange rate is too low, we will focus on producing for exports. And if tempers boil over, we could get ugly protectionism." Do you agree or disagree? Discuss critically.
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