Expectations of firms and households about the future trajectory of inflation tend to influence their current investment and consumption/saving decisions, and the price and wage-setting behaviour. By firmly anchoring inflation expectations, monetary policy can prevent a wage-price spiral and...

Post-COVID, supply shock-induced spike in inflation in India has spawned renewed research interest in assessing the extent to which inflation expectations are anchored to the inflation target, given its importance to securing price stability in the medium run. This article constructs a...