Does Inflation Targeting Anchor Inflation Expectations in India? Evidences from Surveys of Household and Professional Forecasters

Authors

Irfan Ali KC, University of Hyderabad, IndiaFollow

Document Type

Call for Paper

Abstract

This study examines whether inflation targeting (IT) anchors household and professional forecasters expectations in India. It investigates whether food and non-food inflation affect anchoring inflation expectations differently. Primarily, the results indicate significant decreases in the level and variability of expectations. Further, it provides evidence of successful anchoring for professional forecasters' and household expectations. However, it also found food inflation assist anchoring of expectations, while the non-food inflation doesn't. The results suggest the central bank to emphasize more on non-food inflation for better anchoring prospects. Additionally, the study identifies food inflation as the primary contributor to headline inflation variability.

Recommended Citation

Ali KC, Irfan (2024) "Does Inflation Targeting Anchor Inflation Expectations in India? Evidences from Surveys of Household and Professional Forecasters," Bulletin of Monetary Economics and Banking: Vol. 27: No. 0, Article 8.
DOI: https://doi.org/10.59091/2460-9196.2164
Available at: https://bulletin.bmeb-bi.org/bmeb/vol27/iss0/8

First Page

131

Last Page

154

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

India

Affiliation

School of Economics, University of Hyderabad, Telangana, India