Start
November 12, 2021 - 3:30 pm
End
November 12, 2021 - 5:00 pm
Topic: What lowered the inflation in India: inflation targeting or food-price movement?’
Speaker: Pulapre Balakrishnan and M Parameswaran[1]
Moderator: Dr. Chandril Bhattacharyya
Abstract
India has seen lower inflation by historical standards, for the past five years. This has been attributed by some observers to the adoption of inflation targeting by the country’s central bank, the Reserve Bank of India. In particular, it has been asserted that the taming of inflation reflects the anchoring of expectations of it through inflation targeting. We evaluate these claims. Our estimates indicate that there is no basis to the claim that inflation has been lowered due to the anchoring of expectations. On the other hand, we are able to fully account for the trajectory of inflation in India in terms of an explanation of inflation other than the one on which inflation targeting is premised.
[1] Pulapre Balakrishnan is Professor of Ashoka University and Senior Fellow of IIM Kozhikode; M. Parameswaran is Associate Professor, Centre for Development Studies, Thiruvananthapuram. Email: pulapre.balakrishnan@ashoka.edu.in and parameswaran@cds.edu