RBI's Mohan wants rethink on asset-price bubbles
The relationship between monetary policy and asset prices needs to be revisited, said Rakesh Mohan, a deputy governor of the Reserve Bank of India.
Mohan said that it could be argued that the output losses of a pre-emptive monetary action could have been lower than the costs that have materialised from a non-responsive monetary policy. He said that at least, a tighter monetary policy could have thrown sand in the wheels and could have reduced the scale of asset-price movements.
He made the
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