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Efficacy of New Monetary Framework and Determining Inflation in India: An Empirical Analysis of Financially Deregulated Regime

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  • Lekha Chakraborty
  • Kushagra Om Varma

Abstract

Against the backdrop of the new monetary policy framework, this paper analyses the determinants of inflation in the deregulated financial regime. The paper upfront has been kept free from adherence to any particular school of thought on inflation, particularly fiscal theories of price determination (where inflation targeting is emphasised) and the monetarist axioms. Using the ARDL methodology, the determinants of inflation based on Wholesale Price Index (WPI) and the Consumer Price Index (CPI) have been empirically tested for the financially deregulated period.

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  • Lekha Chakraborty & Kushagra Om Varma, 2015. "Efficacy of New Monetary Framework and Determining Inflation in India: An Empirical Analysis of Financially Deregulated Regime," Working Papers id:7336, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:7336
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    1. Aggarwal, Bhavya & Chakraborty, Lekha, 2015. "Towards 2030 UN Agenda on Sustainable Development Goals: Technical Challenges in Measuring Gender Inequality in Asia Pacific," Working Papers 15/157, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    Inflation; Supply Side; ARDL; Wholesale Price Index (WPI) and the Consumer Price Index (CPI); monetarist axioms; monetary policy; financial regime; fiscal; aggregate supply; demand; central government; deficit financing; developing economies; India;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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