Reserve Bank of India raises rates

The Reserve Bank of India has raised the rates once again by 0.5% in the belief that this will curb inflation. This seems to me like the behavior of a student in Economics 101 class who simply and blindly believes that the relationship between interest rate and inflation is so straightforward that he uses interest rate as the only answer to handle inflation. I wish our RBI Governor and the mandarins of our macro economic policy are more creative.

National Management B School, Chennai