Yes. The marginal difference between these two is the actual profit one makes...If by chance inflation exceeds the interest rate then the investment is in loss, no use if it's even three digit (imaginary situation). Earning highest interest rate at the period of the lowest inflation rate is the maximum profit one could earn.
Thats y it's advisable to not entirely rely on earning interest from Bank. Learn the risk and invest in inflation beating investments like mutual funds..
Thats why its the centeral banks job to control inflation and raghuram saying this theory to why he prefers lower inflation and higher intrest rates as when he was the cheif of rbi ultimately taking the consumer safety into his calculation or managemnet or plicies whatever you wanna say .... thats the irigin of theory and this video just explain it to us common folks ...
You guys are seriously great. Just watching Ur video for 20 mins I have gathered lot of knowledge that I can explain anyone and impress them Great job guys
Great Theory- But whenever there is 2.75/per Dosa Increase- DOSAWALA will increase it 5 Rs. So cost of DOSA will be 55 Hence more Interest rate is better. Theory only on STREET VENDOR PRODUCTS Raghuram Rajan's Theory + COMMON SENSE :) To great man
I have a question you took 10% interest and also inflation at 10% so this becomes a sense that real rate becomes 0 ...but with low interest y did you lower the inflation more ...? Which clearly shows a real rate of 2.5%
Inflation is not dependent on Interest rates . Inflation will be there irrespective of interest rate 8 or 10. That is why pensioners argue for higher interest rate. The concept is not properly decoded ..
RBI lends money to other banks at an interest rate, if this interest rate is high, people taking out loans at high interest rate is low which reduces inflation. If RBI interest rate is low, people take more loans at low interest rates which causes inflation.
When the interest rate comes down to 8%, why does inflation go down to 5.5%? Is it based on a correlation factor between rate of interest and rate of inflation?
For the second case, you took the inflation to 5.5% while interest 8%, but for the first one you took both of them equal (10%). That is exactly where the difference is coming from. If you would have considered the inflation lower than the interest rate, lets say 7% the results would be comparable.
ucchechachari Yet, it still will be larger. Point is, controlling inflation is more important than more interest. If you want more interest, government will have to print that money for you, thereby, increasing inflation
i dont really know economics subject that well but i definitely want to know this topic thanks to Raghuram for making me curious.can anyone explain me this bit in detail cz i don't know what just happened.and why pensioners want more interest rates?how does it benefit them?
For RR's justification for low interest-low inflation model to be useful, it is necessary that the interest rate be greater than the inflation rate. I don't see anything in the video that says this would happen.
isn't the inflation inversely proportional to interest rate? lesser the interest rate, lesser the interest the people earn keeping money in the bank.. hence more money with public, which pushes up the inflation
I see a fundamental flaw in this. When pensioners ask for higher interest rates, the investment would slow down, demand would decrease leading to lower inflation, basically decreasing the inflation rate. Higher the difference between interest rate and inflation rate, more would be the benefit to the pensioners ( though it may be short lived). Hence, it makes absolute sense to ask for higher interest rates.
Problem with this economic theory is first we cant get actual inflation rate, it's just estimate be it wpi or cpi. Second he is giving dosa as eg, different products will get impacted at different rate of inflation like good, clothing and shelter. Third, overall his logic is right that people should focus on inflation rather than interest rate but both are related inflation and rate of interest is related, interest rate which u get in banks or pf is always lesser than inflation rate, which ultimately means you will get return which is less than inflation rate meaning you will be at loss,
Well, India's economy has already become "khichri" with the GDP dropping down to -23.9% in this quarter. Hope the Govt. can revive the economy soon with some kind of "Biryani economics" or such.
Raghuram Rajan is a diamond in the field of Economics... He even predicted the 2008 great depression... But India is neglecting his talent... He is teaching in USA...
But inflation and interest rates are tied together. How exactly will you mess around with interest rates without affecting inflation? Either you have to tell banks to increase/decrease the reserves, lower/increase Taxation or increase or decrease government spending. Lol economy is far more complex. It seems like Rajan was trying to simplify it for Common man but he seems to have Deliberately left out many aspects of the economy to not cause confusion
What Mr.Rajan says is accurate but I think the point he's missing is that a pensioner never wishes to withdraw his principal and wishes to live his life only with interest income in general because if he withdraws the principal as well he's afraid that he'll not be able to earn it back as he's retired..!! I hope it makes some sense..
Such a basic stuff was not really known to our policy makers ? Man...even MBA/CA aspirant could have deciphered it....Bhai bhateja policymakers lagte hai...
Usually I really like the voice of the host in scroll.. I hated it for the first time, it's not soo much the voice, just the way she read it. But the video was nice.. exact same example from the book (y)
If you keep on increasing interest rate the inflation rate will automatically increase because people have more money to buy things... That's what he suggest
Doesn't the inflation rise when the interest rate is low ? less the interest rate, more money people keep with themselves rather than keeping it in bank. More money with people pushes up interest rate
I think the pensioner intended to live by eating dosas on interest alone, not withdrawing his working principle to assist. Raghuram should know that you can't have your dosa and eat it too
The narrator is not different from a 8th grade student reading a PPT in her school. अरे भाई, विडिओ 2 minute लंबा बना चलेगा पर स्पष्टीकरण ठीक रखो. Rest is great 🙏🏻
I have a very genuine concern here. Through out the video hands were making dosas.. How come at the end it ended up putting vadas on the plate? Where are those dosas which I cooked? #raghuram #dosa #iwantmydosaback
With these dosa evonomics, you will have no money to buy dosas next year as your principal is used up. The pensioners like to live on interest without eroding the principal as they have usually no other source of income.
It's 3am and I'm now craving dosas. Thank you Raghuram Rajan :/
:D
Haha, same 😛
Yesss..🤣 was thinking the same 😂😂😂
Please explain Pakoda Economics.
SandyRocks Teri samajh mein nahi aayega. Uskey liye zyada IQ aur EQ chayie! 😂😂🤣
Pakoda economics ke liye PhD hona....aur BQ bi hona bhakt Q
gaurav nirwal aab youtube pe comment karne wale Jhatu mera IQ judge karenge. 🤢 🤮
You need to study in the universities of Haldirams and Bikanerwala!
@pings007 haha funny
This is what real journalism means keep on making such content 😍
But the pensioner can only choose the interest rate on his investment. He has no control over the inflation that happens in the market.
Yes. The marginal difference between these two is the actual profit one makes...If by chance inflation exceeds the interest rate then the investment is in loss, no use if it's even three digit (imaginary situation). Earning highest interest rate at the period of the lowest inflation rate is the maximum profit one could earn.
But lower interest rates increases liquidity, which in turn increases the inflation rates.
Thats y it's advisable to not entirely rely on earning interest from Bank. Learn the risk and invest in inflation beating investments like mutual funds..
Thats why its the centeral banks job to control inflation and raghuram saying this theory to why he prefers lower inflation and higher intrest rates as when he was the cheif of rbi ultimately taking the consumer safety into his calculation or managemnet or plicies whatever you wanna say .... thats the irigin of theory and this video just explain it to us common folks ...
Now please explains modi s PAKODA theory of economics.
B's pakode lgao. Reri pe. Na tax do bacche paida kro na padhao na likhao. B's desh aage bdega
@@sun20004u wahi toh Ambani karta tha tera baap pehla Mumbai ma
@@sun20004u aur sun Lauda pakoda ka Liya material lagta hai wo tax Deka hi kharidna pad ta hai
Savage
Soja bhai😂
You guys are seriously great.
Just watching Ur video for 20 mins
I have gathered lot of knowledge that I can explain anyone and impress them
Great job guys
Wow! Please make such videos!! Please!! Thank you for sharing this..
Damn! I love your content.. Keep growing and keep going!
All i could focus on was masala dosa.
me too🤣
Thank you ur all videos is too much informative
Thank you for explaining. It’s pretty cool and I’m gonna go buy that book.
He was one of Greats at his position..
The best and simple way to explain to our Politicians.😊👍
Great Theory- But whenever there is 2.75/per Dosa Increase-
DOSAWALA will increase it 5 Rs. So cost of DOSA will be 55
Hence more Interest rate is better.
Theory only on STREET VENDOR PRODUCTS
Raghuram Rajan's Theory + COMMON SENSE :)
To great man
The dosa is not a literal example - it's metaphorical.
Simple & Clear!! Thank you Raghuram Rajan & Scroll.in :) :)
I have a question you took 10% interest and also inflation at 10% so this becomes a sense that real rate becomes 0 ...but with low interest y did you lower the inflation more ...? Which clearly shows a real rate of 2.5%
Superb video
You guys deserve to have a million subs. Keep up the good work.
This is amazing 👏
Good one👍🏼
how much will pound fall and what will pound to rupee bee after brexit, make a video on that.
Well explained
Good video
I'm cringing at the way she's pronouncing "Dosas"
🤢
I was getting on my nerves. I muted it and then watched 🙄
Haha exactly
😂😂😂😂
Douhsas 😬
Inflation is not dependent on Interest rates . Inflation will be there irrespective of interest rate 8 or 10. That is why pensioners argue for higher interest rate.
The concept is not properly decoded ..
RBI lends money to other banks at an interest rate, if this interest rate is high, people taking out loans at high interest rate is low which reduces inflation. If RBI interest rate is low, people take more loans at low interest rates which causes inflation.
Abis brother please check your basics i think u r nit getting the point of connection between interest rate and inflation
You should refer to the Applied Economics to understand the inverse relationship between inflation rate and interest rate.
When the interest rate comes down to 8%, why does inflation go down to 5.5%? Is it based on a correlation factor between rate of interest and rate of inflation?
Couldn’t understand. Can you make this video again and explain the same using Vada Pavs?
For the second case, you took the inflation to 5.5% while interest 8%, but for the first one you took both of them equal (10%). That is exactly where the difference is coming from. If you would have considered the inflation lower than the interest rate, lets say 7% the results would be comparable.
ucchechachari Yet, it still will be larger. Point is, controlling inflation is more important than more interest. If you want more interest, government will have to print that money for you, thereby, increasing inflation
Excellent!
i dont really know economics subject that well but i definitely want to know this topic thanks to Raghuram for making me curious.can anyone explain me this bit in detail cz i don't know what just happened.and why pensioners want more interest rates?how does it benefit them?
coz they are the investors.
Nice
i saw this channel like 15 min ago and i have already watched 3 videos
I love poorie .make a video about that.
Could someone explain the chaiwala economics !!
For RR's justification for low interest-low inflation model to be useful, it is necessary that the interest rate be greater than the inflation rate. I don't see anything in the video that says this would happen.
Thats really smart
isn't the inflation inversely proportional to interest rate? lesser the interest rate, lesser the interest the people earn keeping money in the bank.. hence more money with public, which pushes up the inflation
I am really great at solving financial problems..... I have a great solution for this......
..
..
..
Just make dosa at home 🤷♂️😜🤣
😂😂
Price of raw material also rises due to inflation and so does of gas cylinder.
@@pranavmathur2275 let them live in their irrelevant virtual world,:)😜😂
Why is it when the inflation rate is less the interest is not equal to the inflation rate? And when it's high it's equal to the interest rate?
Coz it won't make any difference . You will still be able to buy only 2000 dosas, just like at 10%
I see a fundamental flaw in this. When pensioners ask for higher interest rates, the investment would slow down, demand would decrease leading to lower inflation, basically decreasing the inflation rate. Higher the difference between interest rate and inflation rate, more would be the benefit to the pensioners ( though it may be short lived). Hence, it makes absolute sense to ask for higher interest rates.
Did none noticed how in one example interest and inflation are 10. in other 8 and 5.5
You explained about plain dosa and masala dosa...
I came here to know something different but this was a simple common sense. Every commerce student would have known.
Domestic Vox. Great video BTW.
First time i got distracted by dosa ; played the video again
Problem with this economic theory is first we cant get actual inflation rate, it's just estimate be it wpi or cpi.
Second he is giving dosa as eg, different products will get impacted at different rate of inflation like good, clothing and shelter.
Third, overall his logic is right that people should focus on inflation rather than interest rate but both are related inflation and rate of interest is related, interest rate which u get in banks or pf is always lesser than inflation rate, which ultimately means you will get return which is less than inflation rate meaning you will be at loss,
I dint listen to any explonation rathrr enjoying dosa preperation here..
Who wrote the subtitles. So many spelling mistakes. 2:30
Breakfast and dinner and lunch problem for the family solved for 6months.. with 1L
Well, India's economy has already become "khichri" with the GDP dropping down to -23.9% in this quarter. Hope the Govt. can revive the economy soon with some kind of "Biryani economics" or such.
U guys are really amazing, uploading fantastic stuff 👍
Next video: Idly vada economics 👍🏽
Raghuram Rajan is a diamond in the field of Economics... He even predicted the 2008 great depression... But India is neglecting his talent... He is teaching in USA...
Lol and in USA banks are going bankrupt. Why is he not talking about that. Oh wait he is funded by the west just like Congress.
The love for dosas.❤😂
🔥🔥🔥
As good as it gets!
He was baking dosa and idly in Reserve Bank for three years.
the assumption is that inflation rate is lower than interest rate
then this will apply
Can someone ask him to explain about the loans given to crony capitalists during his regime
Benefit from high interest rates are always > damage from high inflation
But inflation and interest rates are tied together. How exactly will you mess around with interest rates without affecting inflation? Either you have to tell banks to increase/decrease the reserves, lower/increase Taxation or increase or decrease government spending.
Lol economy is far more complex. It seems like Rajan was trying to simplify it for Common man but he seems to have Deliberately left out many aspects of the economy to not cause confusion
What Mr.Rajan says is accurate but I think the point he's missing is that a pensioner never wishes to withdraw his principal and wishes to live his life only with interest income in general because if he withdraws the principal as well he's afraid that he'll not be able to earn it back as he's retired..!! I hope it makes some sense..
The pensioner withdraws or not doesn't matter. During high inflation purchasing power of rupee reduces and everyone loses their wealth slowly.
Mitochondria is the powerhouse of cell
I love Masala dosa´s!
That's common sense how tf it's economics bruhhh
Such a basic stuff was not really known to our policy makers ? Man...even MBA/CA aspirant could have deciphered it....Bhai bhateja policymakers lagte hai...
Mr. Raghuraman sir, do something good for India ignoring politics .
This is assuming that inflation and interest rates are interdependent. Which isnt always true
Too many Dosa for the day.
Smart man
I got nothing....should have take eco in 11th😂😂😂
Usually I really like the voice of the host in scroll.. I hated it for the first time, it's not soo much the voice, just the way she read it. But the video was nice.. exact same example from the book (y)
Make him the prime minister please!
So you brought down inflation almost by 50% but Interest rate by 20% , Nice
Inflation rate must be lower than interrest Rate
If you keep on increasing interest rate the inflation rate will automatically increase because people have more money to buy things... That's what he suggest
Doesn't the inflation rise when the interest rate is low ?
less the interest rate, more money people keep with themselves rather than keeping it in bank. More money with people pushes up interest rate
Who is a pensioner?
What does he call the economy where the saved notes get abolished overnight? The oh shit! Economy?
dosa economics does not applies when Major portion of income is expenditure
Watching dosa is more mind soothing to listening to ur economics... 😂😂😂... Not to troll I'm actually hungry now thanks...
I think the pensioner intended to live by eating dosas on interest alone, not withdrawing his working principle to assist. Raghuram should know that you can't have your dosa and eat it too
Just decreasing the interest given to pensioner..it will not decreas the inflation across the country
Interest rates can not be reduced selectively
My dosa is on the way 😏😋
Good informative video
But vadas are the next big thing
Easter egg... Lol
The narrator is not different from a 8th grade student reading a PPT in her school.
अरे भाई, विडिओ 2 minute लंबा बना चलेगा पर स्पष्टीकरण ठीक रखो.
Rest is great 🙏🏻
Instead of this government should start pension fund which Norway has 1 trillion dollars in pension fund.
I have a very genuine concern here. Through out the video hands were making dosas.. How come at the end it ended up putting vadas on the plate? Where are those dosas which I cooked? #raghuram #dosa #iwantmydosaback
I don't like dosa ,I will buy idly😂😂😂
Great video
... and the last shot is a vada.
Genius in economy
india doesn't know his value
Being a CA student....ye toh sala 11th class ma hi pata tha hama .... Hamari teacher na Coca-Cola ka example liya tha us time...
With these dosa evonomics, you will have no money to buy dosas next year as your principal is used up. The pensioners like to live on interest without eroding the principal as they have usually no other source of income.
now i'm feeling hungry
A street vendor knows present day economics but a professor is not.
Isn't this just basic arithmetic?
Inflation is also 10 and interest rate is also 10 Bhaiya tho bank mai paise q dalu mai jab paisa mera badh he nhi raha
Bhai, lekin bechara pensioner itane saare dosa kha payega? Yehi dekhate hai aaj ke DNA test me, Sudhir Chaudhary ke saath.
Dosa ..uff ..... pranthe kyu nhi ??😂😂😂
Because he is from South india.....