Through a Glass Darkly

Ashima Goyal and Arjun Singh
Additional contact information
Arjun Singh: Arjun Singh is Business Analyst, Citigroup Global Services Ltd., e-mail: arjunigidr@gmail.com

Margin: The Journal of Applied Economic Research, 2007, vol. 1, issue 2, 139-166

Abstract: In order to examine if the impact of oil price shocks depends on the structure of an economy, a vertical (VSC) and a horizontal (HSC) long-run supply curve identifications are successively imposed on a three-variable structural vector autoregression (SVAR) with Indian time series data. While core inflation is measured with the VSC, the HSC requires a new concept of demand-driven inflation: residual (demand) inflation, which gives the impact of short and medium-run demand shocks on inflation. Both core and residual inflation are estimated. The data favours the HSC, but both identifications imply that policy demand squeeze aggravated international oil price shocks.

Keywords: JEL Classification: E31; JEL Classification: C32; Oil Shocks; SVAR; Identification Strategies; Developing Economy; Residual Inflation (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:1:y:2007:i:2:p:139-166

DOI: 10.1177/097380100700100201

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