Relationship Between Inflation and Macroeconomic Variables During Pre- and Post-reform Period

Indu Grewal ()
Additional contact information
Indu Grewal: Narsee Monjee Institute of Management, SOL

Chapter Chapter 19 in Digital Economy Post COVID-19 Era, 2023, pp 307-319 from Springer

Abstract: Abstract This study examines the relationships between inflation and three macroeconomic indices using secondary data. Index of Import Prices (IMP), Index of Industrial Production (IIP) and money supply (MS), for India. The overall time period (from 1980 to 2016) was divided into three sub-periods: pre-reform period (1980–1990), post-reform period (1991–2000) and subsequent period (2001–2016). It emerged that the MS happens to be the crucial element for the shift in inflation (CPI) during overall period, followed by IMP. The IIP did not emerge as catalyst for inflation to decrease. The inflation, however, had some effects on IIP during pre- and post-reform periods, but this relationship was bidirectional during subsequent period. Similarly, the MS did not cause inflation during pre- and post-reform periods. Importantly, during first and second sub-periods, the causal effect of imports on inflation did not appear. During subsequent period, the economy felt the heat of imported inflation.

Keywords: Inflation; Granger causality; Money supply; Index of industrial production; Vector autoregressive (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

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:prbchp:978-981-99-0197-5_19

Ordering information: This item can be ordered from
http://www.springer.com/9789819901975

DOI: 10.1007/978-981-99-0197-5_19

Access Statistics for this chapter

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