Logo
Munich Personal RePEc Archive

An Augmented Taylor rule for India’s Monetary Policy: Does Governor Regime Matters?

Bhuyan, Biswabhusan and Sethi, Dinabandhu (2016): An Augmented Taylor rule for India’s Monetary Policy: Does Governor Regime Matters?

[thumbnail of MPRA_paper_75287.pdf]
Preview
PDF
MPRA_paper_75287.pdf

Download (491kB) | Preview

Abstract

This paper examined the monetary policy stance in India during the governors’ regime of Jalan- Reddy-Subbarao- Rajan. An Augmented Taylor Rule is employed to estimate monetary policy response for each period using monthly data. The results revealed that the governor regime matters in the monetary policy response. When output gap has been an important concern during Jalan, Subbarao and Rajan’s period, inflation remained a major concern for Reddy and Rajan’s regime. Interestingly, the interest rate is highly responsive to changes in exchange rate during Rajan period. These findings are consistent with the conditions of economy during those periods. In addition, the exchange rate and output gap remained a greater concern for policy maker in post-crisis period. Nevertheless, we find policy inertia during all regimes.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.