Notwithstanding subsequent economic research, some of it rewarded with Nobel Prizes, which showed that the Philips Curve trade-off has no theoretical basis, there is a school of thought that monetary policy can exploit this inflation-growth trade-off to achieve higher growth (or lower unemployment) by tolerating slightly higher inflation. 19.
For those who believe in the Philips Curve trade-off, India presents a persuasive case for bargaining away a bit of inflation to secure higher growth because the multiplier impact of higher growth on poverty reduction will be larger in the case of India. But wouldn’t higher inflation hurt the poor?