Quarterly Projection Model for India: Key Elements and Properties

Jaromir Benes, Kevin Clinton, Asish George, Pranav Gupta, Joice John, Ondrej Kamenik, Douglas Laxton, Pratik Mitra, G.V. Nadhanael, Rafael Portillo, Hou Wang and Fan Zhang

No 2017/033, IMF Working Papers from International Monetary Fund

Abstract: This paper outlines the key features of the production version of the quarterly projection model (QPM), which is a forward-looking open-economy gap model, calibrated to represent the Indian case, for generating forecasts and risk assessment as well as conducting policy analysis. QPM incorporates several India-specific features like the importance of the agricultural sector and food prices in the inflation process; features of monetary policy transmission and implications of an endogenous credibility process for monetary policy formulation. The paper also describes key properties and historical decompositions of some important macroeconomic variables.

Keywords: WP; core inflation; interest rate; monetary policy; inflation targeting; Reserve Bank of India; inflation episodes in India; forecasting models; monetary policy models; model calibration; monetary policy rules; monetary policy simulations; food inflation; inflation expectation; reaction function; inflation target; transmission mechanism; Inflation; Output gap; Central bank policy rate; Food prices; Global (search for similar items in EconPapers)
Pages: 41
Date: 2017-02-13
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Citations: View citations in EconPapers (17)

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