European Parliament Library

A Monetary Policy Model Without Money for India, Muneesh Kapur, Michael Patra

A New Keynesian model estimated for India yields valuable insights. Aggregate demand reacts to interest rate changes with a lag of at least three quarters, with inflation taking seven quarters to respond. Inflation is inertial and persistent when it sets in, irrespective of the source. Exchange rate pass-through to domestic inflation is low. Inflation turns out to be the dominant focus of monetary policy, accompanied by a strong commitment to the stabilization of output. Recent policy actions have raised the effective policy rate, but the estimated neutral policy rate suggests some further tightening to normalize the policy stance
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I Introduction; II. The State of the Debate - Survival of the Fittest; III. The Indian Experience; IV The Organizing Framework; Aggregate Supply; Aggregate Demand; Monetary Policy Reaction Function; V Estimation Results; Variables and Data; 1 India - The Growth Dynamic; 2 Alternative Indicators of Inflation; 3 Policy Rates in India; IS Curve; 1 Estimates of IS Curve; 2 Forecasting Performance; Phillips Curve; 3 Estimates of Phillips Curve; 4 Estimates of Monetary Policy Reaction Function (Forward-looking); Exchange Rate Pass-through
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (94 p.)
Specific Material Designation
Form Of Item

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