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

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On Monetary Economics

Monetary Policy in India: A Modern Macroeconomic Perspective edited by Chetan Ghate and Kenneth M Kletzer, Springer, 2016; pp xiii+652, price not indicated.

 

The volume under review put together by Chetan Ghate and Kenneth M Kletzer is an important addition to the literature on monetary policy in India. First, it offers a collection of carefully crafted essays on the different structural aspects of the Indian economy that one needs to consider while thinking about its monetary policy. Unlike most developed countries, a typical developing economy like India experiences a substantial degree of segmentation in goods as well as financial markets limiting the efficacy of monetary policy. Moreover, the spillover effects of fiscal policy practised by developing country governments, often coupled with financial repression, make inflation a much harder phenomenon to understand and influence.

Second, by framing the issues related to monetary policy of India in a class of microfounded models, the book brings the analysis closer to contemporary macroeconomic thinking. Third, it is a timely publication considering that a formal institutional framework underlying formulation and implementation of a monetary policy has only been put in place recently with the adoption of an inflation targeting framework in March 2015.

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Updated On : 18th Jul, 2018

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