Policy Actions and Outcomes

Ashima Goyal

Chapter Chapter 2 in History of Monetary Policy in India Since Independence, 2014, pp 33-74 from Springer

Abstract: Abstract The SIIO paradigm is developed further showing how the structure, ideasIdeas , and institutionsInstitutions analyzed in Chap. 1 affected Indian monetary policyMonetary policy outcomes. An aggregate demand–supply framework derived from forward-looking optimization subject to Indian structural constraints is able to explain growthGrowth and inflation outcomes given policy actions. Exogenous supply shocks are used to identify policy shocks and isolate their effects. It turns out policy was often procyclical and sometimes excessively tight when the common understanding is there was a large monetary overhang. But the three factors that cause a loss of monetary autonomyMonetary policy autonomy —governments, markets, and openness—are moderating each other. Open markets moderate fiscal profligacy and dominance. Global crises moderate markets and openness as they encourage greater caution. More congruence between ideasIdeas and structure is improving institutions and contributing to India’s better performance.

Keywords: Aggregate demand–supply framework; Policy shocks; Growth and inflation outcomes; Openness; Markets; Fiscal dominance; Monetary autonomy (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-81-322-1961-3_2

Ordering information: This item can be ordered from
http://www.springer.com/9788132219613

DOI: 10.1007/978-81-322-1961-3_2

Access Statistics for this chapter

More chapters in SpringerBriefs in Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().