6th International Young Scientist Congress (IYSC-2020) will be Postponed to 8th and 9th May 2021 Due to COVID-19. 10th International Science Congress (ISC-2020).  International E-publication: Publish Projects, Dissertation, Theses, Books, Souvenir, Conference Proceeding with ISBN.  International E-Bulletin: Information/News regarding: Academics and Research

Inflation Targeting as a Plausible Monetary Framework for India

Author Affiliations

  • 1Lahore School of Economics (LSE), Burki Campus, Intersection Main Boulevard Phase VI, Lahore, PAKISTAN
  • 2 SDSB, Lahore University of Management Sciences (LUMS), DHA, Lahore, PAKISTAN

Res. J. Recent Sci., Volume 1, Issue (12), Pages 74-78, December,2 (2012)

Abstract

Inflation targeting is the famous framework worldwide today. Primary reasons for its increasing popularity include the breakdown of the broad money demand equation owing to financial sector reforms and globalization, which has rendered monetary targeting less reliable and the broader agreement on maintaining a lower level of inflation across several countries including India. In this paper we analyzed the Indian economy with reference to Taylor’s rule. Keeping in view the structure of the economy, objectives of RBI and the basic financial infrastructure of the country, it seems that India is not yet ready for Inflation targeting framework.

References

  1. Rangarajan C., Role of Monetary Policy, Economic and Political Weekly, 32(52), 3325 – 3328 (1997)
  2. RBI, Annual Report, Various Issues, http://www.rbi.org.in
  3. Jha R., Inflation Targeting in India: Issues and Prospects, International Review of Applied Economics, 22(2), 259-270 (2008)
  4. Reddy Y.V., Evolving Role of the Reserve Bank of India: Recent Developments, RBI Bulletin, 14(12), 2199-2226 (2007)
  5. Chand S.K. and Singh K., How Applicable Is the Inflation-Targeting Framework for India?, India Policy Forum, Global Economy and Development Program, The Brookings Institution, 2(1), 123-181 (2005)
  6. Jha R. and Rath D., On the Endogeneity of the Money Multiplier in India, Indian Economic Reforms, Houndmills: Palgrave Macmillan (2003)
  7. Fraga A., Ilan G. and André M., Inflation Targeting in emerging economies, NBER Working Paper 10019 (2003)
  8. Mohanty M.S. and Marc Klau, Monetary Policy Rules in Emerging Market Economies: Issues and Evidence, BIS Working Paper No. 149 (2004)
  9. McKibbin W. and Kanhaiya S., Issues in the Choice of a Monetary Regime for India, Working Paper (1999)
  10. Masson P., Savastano M. and Sharma S., The Scope for Inflation Targeting in Developing Countries, IMF Working Paper, 97/130 (1997)
  11. Virmani V., Operationalizing Taylor type Rule in Indian Economy, Working Paper ICICI Research Center (2004)
  12. Rodrik D. and Arvind S., Why India Can Grow at 7 Percent a Year or More: Projections and Reflections, IMF Working Paper (2004)
  13. International Monetary Fund, India, selected issues, IMF Country Report 05/87 (2005)