Monday, August 5, 2019

8 August 2019: Does Inflation Targeting Anchor Inflation Expectations? Evidence from India

Shekhar Tomar
Indian school of Business (ISB), Hyderabad

Organised by
Indian Statistical Institute (ISI), Delhi Center

We use a novel survey data on inflation expectations of households to evaluate the role of inflation targeting (IT) regime in achieving anchored inflation expectations. This data is available both before and after the adoption of IT by India in 2015 and allows comparison of inflation expectations between the two periods. We find evidence for anchored inflation expectations in every component of consumer price inflation, headline, food and non-food, only during the IT period. More importantly, we find a muted spillover from food inflation to both food and non-food inflation expectations in this period. The lack of spillover from food inflation, which remained equally volatile in both periods, explains the anchored expectations and improved inflation performance under the IT regime.

Date: August 8, 2019
Time: 03:30 P.M.

Seminar 2
Indian Statistical Institute Delhi Centre,
7, S. J. S. Sansanwal Marg,
New Delhi-110016 (INDIA)


View Larger Map

No comments:

Post a Comment