Monetary Conditions Index for India

Kannan R, Siddhartha Sanyal and Binod Bihari Bhoi

Working Papers from eSocialSciences

Abstract: The authors attempt to construct a monetary conditions index (MCI) for India in order to take both interest rate and exchange rate channels simultaneously into consideration while evaluating the stance of monetary policy and evolving monetary conditions. The paper also constructs a "broad" MCI which incorporates credit growth as an additional indicator of monetary conditions. Since the index is constructed using differences between actual and an “arbitrarily†chosen base period, the index only represents a relative degree of change and not an absolute measure. No significance is usually attached to the level of the index and it should not be interpreted too mechanistically. [RBI Occassional Papers, Winter 2006].

Keywords: monetary policy; Rate Channel; monetary conditions index; MCI; India; weighted average; domestic interest rate; exchange rate; base period; aggregate demand; prices; real variables; credit market; banks; RBI (search for similar items in EconPapers)
Date: 2007-11
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.esocialsciences.org/Download/repecDownl ... &AId=1273&fref=repec

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:ess:wpaper:id:1273

Access Statistics for this paper

More papers in Working Papers from eSocialSciences
Bibliographic data for series maintained by Padma Prakash ().