ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By Anuradha Patnaik

Monetary Policy Announcements of the Reserve Bank of India and the Role of Information Shock

Inflation-targeting central banks supplement their monetary policy announcements with communication in the form of speeches and publication of text documents. The markets react to the surprise component of the rate action and the communication by the central bank. Thus, the monetary surprise derived from the reaction of markets, following a policy announcement, is agglutinated with the central bank information. The present paper attempts to identify and examine the efficacy of such an information shock in influencing the inflation expectations of households, interest rate expectations of agents, output and inflation.

Disaggregate Food Inflation in India

Inflation may vary across space and commodities due to differences in region-specific or idiosyncratic factors such as climate, local culture, and the existing institutional set-up. These factors cause disaggregate, or regional, inflation, which in turn coalesces into aggregate inflation. Food inflation is a typical example. Spatial factors and rainfall are the most important determinants of disaggregate food inflation. Local inflation differs from aggregate inflation; the rate of inflation varies by city and commodity; and the determinants of rural and urban inflation are different. In addition to demand management policies, aggressive supply-side policies are the need of the hour.