Raghuram Rajan foresaw the financial crisis. Now he has a new prediction: the end of export-led growth, at least for the foreseeable future.
India’s central bank governor upset some people in New Delhi when he first suggested that Prime Minister Narendra Modi was wrong if he thought he could lead his country out of poverty by applying China's growth model. China sold into a global economic boom that was fueled by the accumulation of debt. The world economy now is weak, mostly because all that debt now must be paid. Rajan supported Modi’s desire to expand that country’s manufacturing base, but said the government would have to generate demand for the increased production at home.
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