ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Saurabh GhoshSubscribe to Saurabh Ghosh

A Horse Race among the Alternative Taylor Rule Specifications

The paper estimates a slew of augmented Taylor rule specifications using call and treasury bill rates. After accounting for break points, we calculate the output gap based on a single-index dynamic factor extracted from monthly high-frequency indicators that are representative of broad sectoral activity. In our study, we found that interest rates in India are mostly in line with the augmented Taylor rule specifications after the Reserve Bank of India started using flexible inflation targeting.
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