Description |
1 online resource (37 pages) : color illustrations |
Series |
IMF working paper ; WP/16/166 |
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IMF working paper ; WP/16/166.
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Contents |
Cover; Contents; I. Introduction; II. Some Context: The Stubbornness of Retail Inflation; III. Followed by the Sharp Disinflation; IV. Why has Inflation Declined? Quantifying the Contribution of Different Factors; A. Single Equation Model; B. Empirical Findings; C. Quantifying the Contribution of Different Factors; D. Robustness; E. More on Wages and Inflation; V. Conclusions and Policy Implications; References; Boxes; 1. Inflation, Wages and MSPs: What's Driving What?; 2. Why not a Larger Role for Oil?; 3. The Role of MSPs: Separating the Wheat from the Chaff; Figures |
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1. Frequency Distribution of CPI-IW Inflation: 2006-132. CPI: Headline and Core-2006-13; 3. Y-o-Y Inflation in the Major Groups and Sub-Groups of CPI; 4. Fit of the Single Equation Model; 5. Growth in Wages and Lagged CPI Inflation; 6. Growth in MSP, Lagged CPI Inflation, and World Food Prices; 7. Impulse Responses from a Vector Autogression Model; Tables; 1a. Dis-inflation Dynamics: 2013/14 and 2014/15; 1b. Food Disinflation Dynamics: FY15 versus FY14; 2. Determinants of Inflation in India; 3a. Contributors to Disinflation Between 2013/13 and 2014/15 |
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3b. Contributors to Disinflation Between 2015 and 20144. Determinants of Inflation in India: Robustness Checks; 5. Inflation and Wages in India; Appendix |
Summary |
We analyze the dramatic decline in India's inflation over the last two years using an augmented Phillips Curve approach and quantify the role of different factors. Our results suggest that, contrary to popular perception, the direct role of lower oil prices in India's disinflation was relatively modest given the limited pass-through into domestic prices. Instead, we find that inflation is a highly persistent process in India, reflecting very adaptive expectations and the backward looking nature of wage and support price-setting. As a consequence, we find that a moderation of expectations, both backward and forward, and a rationalization of Minimum Support Prices (MSPs), explain the bulk of the disinflation over the last two years |
Notes |
"August 2016." |
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At head of title: International Monetary Fund, Asia and Pacific Department |
Bibliography |
Includes bibliographical references (page 37) |
Notes |
Online resource; title from pdf title page (IMF.org Web site, viewed September 20, 2016) |
Subject |
Inflation (Finance) -- India
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Prices -- India
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Phillips curve.
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Inflation (Finance)
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Phillips curve
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Prices
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India
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Form |
Electronic book
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Author |
Pankaj Kumar, author.
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Mishra, Prachi, 1975- author, (IMF staff)
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International Monetary Fund, publisher.
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International Monetary Fund. Asia and Pacific Department, issuing body.
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ISBN |
9781475523935 |
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1475523939 |
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