ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Macroeconomic Policy for an India in Transition

Two types of macroeconomic policies, categorised as Type I and Type II, are developed. A comparison shows why Type II would lead to better growth and infl ation outcomes in the Indian context. Analytical frameworks, data, and fundamentals, all of which are found to support Type II policy, are discussed, showing that India’s recent macroeconomic policy has tended towards that of Type I. This implies that growth and employment creation fall below potential even as the potential itself falls. Ironically, the primary infl ation expectations anchoring the function of infl ation targeting are underutilised.



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Updated On : 27th Nov, 2017

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