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@arvindsubraman and Josh Felman have a new paper in which they say the big problem is a wave of bad real estate loans clogging up bank balance sheets (sound familiar?).
hks.harvard.edu/sites/default/…
An easy way to do this would be QE. Have the central bank print money and buy housing-backed loans from banks. Of course, India's inflation is already rising, so this could risk stagflation...
In the meantime, India could make a big push to encourage more urbanization.
Agricultural productivity would go up. Wages would go up. And banks would have a new boom to encourage them to lend.
Bailing out the banks and pushing for urbanization are two policies that are worth a shot.
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