Understanding The High Inflation Trend in India
Goyal, Ashima | March 2014
Abstract
Recent Indian growth and inflation can be explained if aggregate supply is elastic but subject to upward shocks. Estimations of aggregate supply and other formal tests support such a structure. But then, reducing aggregate demand lowers growth more than inflation. The latter is best addressed at the level of the propagation mechanisms that push up the cost. Some of these, such as food price and wage inflation, sectoral bottlenecks, sharp depreciations and governance failures are examined. There is a role for monetary tightening to anchor inflation expectations that push wages up. It can be mild, however, if supported by supply-side initiatives.
Citation
Goyal, Ashima. 2014. Understanding The High Inflation Trend in India. © Asian Development Bank. http://hdl.handle.net/11540/1419. License: CC BY 3.0 IGO.Keywords
Financial Stability
Financial Management System
Financial Restructuring
Capital Market Development
Erosion
Market Development
Economics
Erosion
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Citable URI
http://hdl.handle.net/11540/1419Metadata
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