Alternative Monetary Policy Rules for India

WPIEA2012118 Image
Price:  $18.00

Author/Editor: Michael Debabrata Patra, Muneesh Kapur
Release Date: © May, 2012
ISBN : 978-1-47550-347-0
Stock #: WPIEA2012118
Stock Status: On back-order

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This paper empirically evaluates the operational performance of the McCallum rule, the Taylor rule and hybrid rules in India over the period 1996-2011 using quarterly data, with a view to analytically informing the conduct of monetary policy. The results show that forward-looking formulations of both rules and their hybrid version - setting a nominal output growth objective for monetary policy with an interest rate instrument - outperform contemporaneous and backward-looking specifications, especially when targeting core components of GDP and inflation, and combine the best parts of efficiency and discretion.


Banks and banking , Central banks , Economic policy , Financial institutions and markets , Monetary policy

More publications in this series: Working Papers

More publications by: Michael Debabrata Patra ; Muneesh Kapur