RBI Bulletin - July 2023 - RBI - Reserve Bank of India
RBI Bulletin - July 2023
Today, the Reserve Bank released the July 2023 issue of its monthly Bulletin. The Bulletin includes three speeches, six articles and current statistics. The six articles are: I. State of the Economy; II. When Circumspection is the Better Part of Communication; III. A Prototype Dynamic Stochastic General Equilibrium Model for India; IV. Quality of Public Expenditure and Economic Growth: An Empirical Assessment at Sub-National Level; V. India @ 100; and VI. Perspectives on the History of the Reserve Bank of India. I. State of the Economy Global growth momentum appears to be stalling, especially manufacturing and investment, amidst moderating headline inflation with a stubborn core. Market expectations of future interest rates have gone up in response to the hawkish policy stance; equity prices have flattened; and bond yields have hardened. In India, the rain deficit is rapidly closing amidst a highly cyclone-skewed distribution. Manufacturing and services activity remains in expansion albeit with some sequential moderation in June. The overall balance of payments improved in Q1:2023-24, indicating that financial flows comfortably exceeded the current account again on a quarterly basis. II. When Circumspection is the Better Part of Communication By Michael Debabrata Patra, Indranil Bhattacharyya and Joice John This article examines the role of monetary policy communication in the form of forward guidance, particularly in a rate tightening cycle, through an auto regressive conditional heteroscedastic (ARCH) model using overnight indexed swap rates. Highlights:
III. A Prototype Dynamic Stochastic General Equilibrium Model for India By Shesadri Banerjee, Harendra Behera and Michael Debabrata Patra This article estimates a prototype Dynamic Stochastic General Equilibrium (DSGE) model for India to assess the structural changes in the economy and shifts in key parameters of monetary policy before the shock of the pandemic and the war in Ukraine, and after them. Highlights:
IV. Quality of Public Expenditure and Economic Growth: An Empirical Assessment at Sub-National Level By Ipsita Padhi, Ranjeeta Mishra, Samir Ranjan Behera and Deba Prasad Rath A sustained improvement in the quality of public spending through a higher share of productive expenditure can play a conducive role in supporting growth. This article deploys a dynamic factor model to obtain a composite index of the quality of government expenditure for 14 major Indian States over the period 2005-06 to 2019-20 and examines its relationship with gross state domestic product (GSDP) growth in a pooled ordinary least squares (OLS) framework. Highlights:
V. India @ 100 By Harendra Behera, Dhanya V, Kunal Priyadarshi and Sapna Goel This article provides an indicative roadmap for India to become a developed (high-income) country by 2047-48. Highlights:
VI. Perspectives on the History of the Reserve Bank of India By Ashutosh Yashwant Raravikar This article takes a bird’s eye view of the history of the Reserve Bank through the five volumes of the RBI history, in the context of the recent release of the fifth volume covering the period 1997-2008. Highlights:
The views expressed in the Bulletin articles are of the authors and do not represent the views of the Reserve Bank of India. (Yogesh Dayal) Press Release: 2023-2024/610 |