In an economy with low frictions and relatively free markets, a 21,000 Rs/night hotel would prompt other entrepreneurs to open more hotels, thus pushing the price down and generating more employment. But when opening a business, acquiring land, licenses is nearly impossible without proper 'Connections', we are left with economy that is not functioning for neither the middle class nor the poor. Hey, at least the poor have can vent their frustration by sloganeering and rioting against the muslims in the streets. Thats not nothing, right?
Higher prices lead to lower prices, yes; and lead times for capital-intensive projects are huge. The poor are losing hope of progress, so more welfarism is the only route.
The next ten years are not going to be anything like the last ten years. Tighten your seat belts.
In an economy with low frictions and relatively free markets, a 21,000 Rs/night hotel would prompt other entrepreneurs to open more hotels, thus pushing the price down and generating more employment. But when opening a business, acquiring land, licenses is nearly impossible without proper 'Connections', we are left with economy that is not functioning for neither the middle class nor the poor. Hey, at least the poor have can vent their frustration by sloganeering and rioting against the muslims in the streets. Thats not nothing, right?
Higher prices lead to lower prices, yes; and lead times for capital-intensive projects are huge. The poor are losing hope of progress, so more welfarism is the only route.