 Examining the Trade-Off Between Price and Financial Stability in IndiaIla Patnaik, Shalini Mittal and Radhika Pandey Working Papers from eSocialSciences Abstract: In recent years, many emerging economies including India have adopted inflation targeting framework. Post the global financial crisis, there is a growing debate on whether monetary policy should target financial stability. Using India as a case study, it presents an empirical approach to assess whether monetary policy can target financial stability. This is done by examining the trade-off between price and financial stability for India. Using correlation between price and financial cycles, it finds that a trade-off exists between price and financial stability. The findings is robust to a series of robustness checks. The study has implications for the conduct of monetary policy in emerging economies. Presence of a trade-off may constrain the ability of a central bank in emerging economies to target financial stability with monetary policy instrument. Keywords: eSS; inflation targeting framework; global financial crisis; monetary policy; financial stability; empirical approach; trade-off; price; financial cycles; robustness checks; central bank; monetary policy instrument; India. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ess:wpaper:id:12979 Access Statistics for this paper More papers in Working Papers from eSocialSciences |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.