Reading through the Rajan Committee Report, I realized something that I think a lot of people already know: A country's exchange rate and inflation are related. More specifically, if there is increased economic activity, either the country's currency must appreciate, or inflation must rise, or both.
However, while currency appreciation affects the rich more, inflation affects the poor more. Thus, the country is faced with a dilemma -- the rich control power, but the poor control the vote bank. The question is -- can the politicians (i.e. the rich) fool the poor long enough to keep getting rich?
Put another way, assuming the rich (and thus privileged) are more used to handling complexity, do complex laws and regulations ultimately hurt the poor and benefit the rich?
However, while currency appreciation affects the rich more, inflation affects the poor more. Thus, the country is faced with a dilemma -- the rich control power, but the poor control the vote bank. The question is -- can the politicians (i.e. the rich) fool the poor long enough to keep getting rich?
Put another way, assuming the rich (and thus privileged) are more used to handling complexity, do complex laws and regulations ultimately hurt the poor and benefit the rich?
