Economics at your fingertips  

Examining the Trade-Off Between Price and Financial Stability in India

Ila 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)
Date: 2019-01
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) ... AId=12979&fref=repec

Related works:
Working Paper: Examining the trade-off between price and financial stability in India (2019) Downloads
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:

Access Statistics for this paper

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

Page updated 2023-01-12
Handle: RePEc:ess:wpaper:id:12979