This paper empirically evaluates the operational performance of the McCallum rule, the Taylor rule and hybrid rules in India over the period 1996-2011 using quarterly data, with a view to analytically informing the conduct of monetary policy. The results show that forward-looking formulations of...

We propose a novel framework to gauge the credibility of central banks' commitment to an inflation-targeting regime. Our framework combines survey data on macroeconomic forecasts with high-frequency financial market data to understand how inflation targeting makes economic agents change their...

This study investigates gender disparities in inflation expectations in India using data from the Reserve Bank of India’s Households’ Inflation Expectations Survey (March 2011 to September 2022). To determine these differences, the authors analyze the expectations of future prices for...

The implementation of economic reforms under new economic policies in India was associated with a paradigmatic shift in monetary and fiscal policy. While monetary policies were solely aimed at "price stability" in the neoliberal regime, fiscal policies were characterized by the objective of...

The paper reviews the calculation of Indian wholesale and consumer price indices and suggests improvements in the light of past experience and international best practices. It confirms that food inflation has been the driver of domestic inflation. The paper studies the recommendations of the...

This paper examines monetary transmission mechanism for India in the context of a small macro model using quarterly data. Given the volatility emanating from the agricultural sector, the paper models both overall growth and overall inflation as well as non-agricultural growth and non-food...

Against the backdrop of the move to an inflation targeting monetary policy framework beginning 2014 with consumer price index (CPI) inflation as the nominal anchor, this paper revisits monetary transmission dynamics. Rather than confining to the typical three equation New Keynesian model, this...

Forward-looking monetary policy communication has become a key element of flexible inflation-targeting regimes across advanced and emerging market economies. The Reserve Bank of India’s implementation of a flexible inflation targeting framework since 2016 has been supported by a broad set of...

This paper provides a Vector Auto-Regression (VAR) analysis of inflation and monetary policy. It identifies monetary policy shocks in a benchmark recursive structure of VARs with two alternative inflation measures, viz., headline WPI and core inflation measure. Unlike the results in case of WPI,...

This paper focuses on modeling and forecasting inflation in India using an augmented Phillips curve framework. Both demand and supply factors are seen as drivers of inflation. Demand conditions are found to have a stronger impact on non-food manufactured products (NFMP) inflation vis-a-vis...