India's structural opportunity in a new age of financial repression
The country could receive capital flows from rich countries that attempt to inflate their debts away
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The country could receive capital flows from rich countries that attempt to inflate their debts away
Enter financial repression, which generally means ways in which the government effectively gets the private sector to pay down the public debt.
2/18/2021 2:54:56 PM GMT There is a Chinese proverb that says: if you want to get rich, build a road first. To paraphrase the proverb, we would say: if countries want to become rich, they must first build infrastructure. The conditions for this to happen in the current era seem ideal. Policy makers will have to continue to provide liquidity after the end of the pandemic, with much of it going to private and public spending on infrastructure. This policy will increase debt and, as a result, countries will inevitably keep interest rates lower than inflation and growth in order to make debt man...