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

Core inflationSubscribe to Core inflation

A Statistical Quirk

With core inflation still sticky, any significant dip in consumer prices is very unlikely.

Understanding Inflation Dynamics in India

The flexible inflation targeting framework was formally adopted by India in 2016 with an amendment to the Reserve Bank of India Act. This paper attempts to throw light on the dynamics of consumer price index headline, core, and food inflation, using a relatively young and atheoretical approach pioneered by Stock and Watson in 2007. The empirical results, indicating that the behaviour of core inflation is different from that of headline and food inflation, have implications for the conduct of monetary policy.

Inflation Convergence and Anchoring of Expectations in India

Careful research on the inflation targeting regime’s impact on anchoring inflation expectations, as well as an empirical examination of convergence, is used to assess the direction of convergence between core and headline inflation, as well as the efficacy of the expectation channel compared to the aggregate demand channel of monetary transmission. There is evidence of more anchoring, with the Reserve Bank of India communications as well as headline inflation affecting short-run inflation expectations and core inflation dominating in the long run.
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