Press Release RBI Working Paper Series No. 19 QE-II and FII inflows into India – Is there a Connection? @Anand Shankar Abstract 1Faced with near zero interest rates, monetary easing in the form of quantitative easing (QE) undertaken after the global financial crisis in many developed countries have added to global liquidity and are said to be fuelling massive capital flows into the Emerging Market Economies. In this context, this paper traces a brief history of QE and

Press Release RBI Working Paper Series No. 15An Empirical Analysis of Monetary and Fiscal Policy Interaction in India@Janak Raj, J. K. Khundrakpam & Dipika Das Abstract •This study analyses the behaviour of monetary and fiscal policies interaction in India using quarterly data for 2000Q2 to 2010Q1. It finds that, even after the elimination of automatic monetisation of fiscal deficit in 1997 and prohibiting RBI from buying government securities in the primary marke

Press Release RBI Working Paper Series No. 13 Long Run and Short Run Saving- Investment Relationship in India @Bichitrananda Seth Abstract 1The present study examines short and long run relationship between gross domestic savings and investment as well as corporate sector savings and corporate sector investment in India using Engel Granger cointegration test. Also attempt is made to find out the rate of adjustment in the disequilibrium being corrected in the short ru

Press Release RBI Working Paper Series No. 14 Recent Global Crisis and the Demand for Gold by Central Banks: An Analytical Perspective @A Karunagaran Abstract 1When India purchased 200 tonnes of gold under the International Monetary Fund's limited gold sales programme, it was interpreted inter alia that it may further inflate the gold price when the price was already ruling high. This motivated us to examine the general trend among the central banks’ demand for gold

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