Central bank Quote by Raghuram Rajan
“I will say this: the central banks can actually support growth beyond a point. When there is no inflation, they can cut interest rates, and that is the way they support growth, but if you cut interest rate to the bone, there is nothing more to cut. It is very hard to support growth beyond that.”
About This Quote
Source Speech: IMF World Economic Outlook, 2015
Central banks can stimulate growth until rates hit zero; beyond that, further cuts have no effect, limiting policy tools.
In simple terms: Rate cuts work only until they’re zero; then they’re useless.
Key Takeaway
Recognize the limits of monetary policy and seek alternative growth drivers.
Themes
economics
policy
monetary
growth
Mood
analytical
cautious
Type
economic
policy
When to use this quote
- government budgeting
- business investment
- inflation targeting
- structural reforms
Key Concepts
Zero lower bound
policy effectiveness
financial stability
Questions to Reflect On
- What alternative policies can support growth after rates hit zero?
- How can economies diversify growth sources?
A Different Perspective
Relying solely on rate cuts can ignore fiscal and structural solutions.
