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

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Time-varying Effect of Inflation Uncertainty

This paper investigates the effect of the uncertainty associated with the inflation, on inflation over time using the monthly wholesale price index data for the time period 1964–2016 and applying a stochastic volatility in mean model with the time-varying parameter. The evidence indicates a mixed impact as both positive and negative estimates are obtained.

Inflation with Disinflation?

Price inflation in India as measured by the Wholesale Price Index and the Consumer Price Index has shown diverging trends. While WPI indicates a disinfl ationary situation for 16 months, CPI indicates inflation. Explaining the construction of the two indices, the trends of subgroups of both indices are presented. It is found that the different sample sizes and weightages of commodity groups of both indices and price interventions in the market explains, at least in part, this odd situation of infl ation along with disinfl ation.

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