India’s Inflation Process Before and After Flexible Inflation Targeting

Author: Blagrave Patrick and Lian Weicheng

Volume/Issue: Volume 2020 Issue 251

Publication date: November 2020

ISBN: 9781513561233

$18.00

Add to Cart by clicking price of the language and format you'd like to purchase

Available Languages and Formats


English

Prices in red indicate formats that are not yet available but are forthcoming.

Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Finance , Inflation , Economics- Macroeconomics , Money and Monetary Policy , India , WP , inflation expectation , headline inflation processes , food price inflation , core-inflation process , core-inflation determinant , headline inflation forecast , Inflation targeting , Inflation , Food prices , Emerging and frontier financial markets , Import prices , Global

Also of interest

WORKING PAPERS PUBLISHED IN JUNE 2004

WORKING PAPERS PUBLISHED IN JUNE 2005

WORKING PAPERS PUBLISHED IN SEPTEMBER 2003

Summary

We study the inflation process in India, focusing on the periods before and after the adoption of flexible inflation-forecast targeting (FIT) in India. Our analysis uses several approaches including standard Phillips curve estimation for headline and core inflation, an examination of the sensitivity of medium-term inflation expectations to inflation surprises, and the properties of convergence between headline and core inflation. Results indicate an important role for domestic factors in driving the inflation process, and there is evidence that expectations have become more anchored since 2015. This result could be attributable to FIT adoption, or to persistently low food prices which dominate the post-FIT-adoption period. The policy implications of these structural changes in the inflation process are investigated using a semi-structural model calibrated to the Indian economy.