<h1>RBI Study: Lower Real Interest Rates Boost Growth and Investment, But High Inflation is Detrimental.</h1> A Reserve Bank of India study examined the impact of real interest rates on growth and investment, concluding that while lower real rates can boost these areas, tolerating higher inflation to achieve this is not viable as it can negatively affect growth. The study highlighted that real interest rates are crucial for macroeconomic growth and investment, despite nominal rates being significant for firm-level planning. It noted that declining marginal productivity of capital and pressures on firms' internal rates of return necessitate significant interest rate reductions to stimulate investment. Empirical data indicated that a 100 basis point increase in real interest rates could reduce investment rates by 50 basis points and GDP growth by 20 basis points.