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dc.contributor.authorAiman, Altamash
dc.contributor.authorReddy, Shiva
dc.date.accessioned2017-10-06T06:14:57Z
dc.date.available2017-10-06T06:14:57Z
dc.date.issued2017-06
dc.identifier.urihttp://hdl.handle.net/10973/46973
dc.description.abstractThis paper seeks to examine the effect of supply shocks on the goals of inflation targeting as a monetary policy strategy. A VAR model was employed using New Keynesian Phillips Curve (NKPC) to capture impulse responses of supply shocks on CPI inflation. The result suggests that the effect of shocks to fuel and oil on CPI is strong and but short-lived, while that of food and beverages is very strong and persistent. This could be detrimental for Inflation targeting as it would shoot up CPI inflation resulting in an increase in household inflation expectations and huge disinflationary cost to bring it down under target range. Some lessons are drawn from international experiences to tackle supply shocks in time of crisis.en_US
dc.language.isoen_USen_US
dc.publisherGokhale Institute of Politics and Economics (GIPE), Pune (India)en_US
dc.relation.ispartofseriesWorking Paper;42
dc.titleInflation targeting in Indiaen_US
dc.typeWorking Paperen_US


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