Understanding Inflation in India / Laurence Ball, Anusha Chari, Prachi Mishra.

Format:

Book

Author/Creator:

Ball, Laurence.

Contributor:

National Bureau of Economic Research.

Chari, Anusha.

Mishra, Prachi.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22948.

NBER working paper series no. w22948

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

This paper examines the behavior of quarterly inflation in India since 1994, both headline inflation and core inflation as measured by the weighted median of price changes across industries. We explain core inflation with a Phillips curve in which the inflation rate depends on a slow-moving average of past inflation and on the deviation of output from trend. Headline inflation is more volatile than core: it fluctuates due to large changes in the relative prices of certain industries, which are largely but not exclusively industries that produce food and energy. There is some evidence that changes in headline inflation feed into expected inflation and future core inflation. Several aspects of India's inflation process are similar to inflation in advanced economies in the 1970s and 80s.

Notes:

Print version record

December 2016.