Centre for Development Economics
Department of Economics, Delhi School of Economics


Inflation Models and Inflation in India


Pulapre Balakrishnan
Asoka University

19th September 2018 (Wednesday) at 3:00 PM

Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics

All are cordially invited

In mainstream macroeconomics today inflation is related to the output gap, defined as the deviation of output from its ‘natural’ level (Romer 2012). This model of inflation has been adopted by the leading central banks globally, including India’s (RBI 2014), underpinning a move to inflation targeting as the central objective of monetary policy. From joint work with M. Parameswaran, I shall present an alternative model of inflation, one based on features that may be considered typical of the Indian economy and embodying a certain understanding of what drives the inflationary process here. I will next present results of a test of both the models using data from the Indian economy. The exercise is conclusive and the results bear significance for the choice of an anti-inflationary policy for India.

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