Press Release RBI Working Paper Series No. 18 Inflation Threshold in India: An Empirical Investigation @Deepak Mohanty, A B Chakraborty, Abhiman Das and Joice John Abstract 1This paper examines the issue of the existence of threshold effects in the relationship between inflation rate and real GDP growth in India using 3 different approaches. In view of the structural changes of the economy, the empirical analysis uses data for the period of Q1:1996-97 to Q3:2010-11

Press Release RBI Working Paper Series No. 17Why Persistent High Inflation Impedes Growth? An Empirical Assessment of Threshold Level of Inflation for India @Sitikantha Pattanaik G V Nadhanael Abstract *In the policy debate on growth-inflation tradeoff and the role of monetary policy in managing the tradeoff in the short-run, theoretical and empirical research suggests the presence of a country specific threshold level of inflation. Monetary policy may accommodate inf

Press Release RBI Working Paper Series No. 16 Measures of Core Inflation in India – An Empirical Evaluation @Janak Raj & Sangita Misra Abstract *This study attempts to analyse six exclusion-based measures of core inflation in India based on new series of WPI (2004-05=100). These are: WPI excluding food; WPI excluding fuel; WPI excluding food and fuel; non-food manufacturing; WPI excluding fuel and basic metals and metal products; and WPI excluding fuel, metal gro

Press Release RBI Working Paper Series No. 11 Effects of Recent Financial Crisis on Optimal Asset Allocation of Foreign Exchange Reserves@A. K. Srimany, Sneharthi Gayen and Ranjeev *Post financial crisis, yield in the developed sovereign markets is prevailing at very low level and consequently return generated by deployment of foreign exchange reserves have been very low together with increased risk of getting negative return more frequently.In this paper, we discuss

Press Release RBI Working Paper Series No. 12Monetary Policy and Food Prices in India@Jeevan Kumar Khundrakpam and Dipika Das Abstract*Using a vector error correction model (VECM), the paper examines the relative response of food and manufactured prices to change in interest rate and money supply in India during the period 2001:Q1 to 2010:Q2. It finds that, in the long-run, while money supply leads to rise in the prices of both food and manufactured prices, hike in c

RBI Working Paper Series No. 10 Determinants of Primary Yield Spreads of States in India: An Econometric Analysis@Dhritidyuti Bose, Rajeev Jain and L. Lakshmanan *The year 2006-07 was marked by a switch over to the auction based issuances of the State Development Loans. Presently, India’s sub-national debt market can at best be regarded at a nascent stage of development compared to other advanced economies. With an increasing emphasis on fiscal decentralisation, it is

RBI Working Paper Series No. 09Treatment of Valuables as Capital Formation in India: Some Issues and Perspectives @Rakesh Kumar Abstract † As per UNSNA recommendations, valuables as a separate item had been introduced in the expenditure side of GDP. Since India is one of largest importer and user of gold for various purposes, this treatment resulted into higher share of valuables in capital formation in the economy. Moreover, from conceptual aspect, these valuables a

RBI Working Paper Series No. 06 The Velocity Crowding-out Impact: Why high money growth is not always inflationary @Sitikantha PattanaikSubhadhra S Abstract: In the mainstream monetary policy consensus that prevailed prior to the global crisis, there was increasing de-emphasis on money and credit aggregates in the conduct of monetary policy, because of the overwhelming faith on the interest rate, both as an instrument of policy and as an indicator of overall monetary

RBI Working Paper Series No. 07 Sensitivity of Capital Flows to Interest Rate Differentials: An Empirical Assessment for India @Radheshyam Verma and Anand Prakash *In the aftermath of the global financial crisis, multi-speed recovery and divergent inflationary trends have led to asymmetric monetary exit between Emerging Market Economies (EMEs) and the advanced economies. An outcome of this process has been return of excessive capital flows to EMEs, exerting pressure o