The basic concept of Keynesian economics lies within the government’s expenditures to reduce the impact of recession during the natural process of the business cycle. Developed countries try to minimise the interest rates to provoke spending. However, in Pakistan, the recent increase of interest rate to 150 basis points will raise more issues than bring solutions. If the monetary policymakers think that by increasing the interest rates inflation can be controlled, then this idea may not prove to be true for Pakistan. Since the inception of this government, inflation and interest rate have moved in the same direction.

Source: Pakistan Today December 03, 2021 06:27 UTC