RBI discusses New Frontiers on Statistical Methods and Information Base at its 11th Statistics Day Conference- (Reserve Bank of India) (06 Jul 2017)

MANU/RPRL/0112/2017

Banking

The Reserve Bank celebrated its '11th Annual Statistics Day Conference' on July 04, 2017 on the Theme 'New Frontiers on Statistical Methods and Information Base for Central Banks'. The Statistics Day Conference is an annual feature in the Reserve Bank's calendar after the Government of India designated the birthday of (Late) Prof. P. C. Mahalanobis as the "Statistics Day", in 2007. Distinguished academicians and practitioners participated in the Conference.

In his inaugural address, Dr. Urjit R. Patel, Governor, highlighted the momentous contribution made by Prof. Mahalanobis in the field of theoretical and applied statistics and his exemplary role in development of the Indian statistical system. The Governor observed that there is a continuous effort to improve measurement, modelling and prediction of economic outcomes and developments. He stressed the "information base" part of the theme of the Conference since the collection and analysis of detailed data aid in designing better targeted responses in a variety of settings in practice and policy. The Governor also acknowledged that the present times are interesting for economic analysis and it is useful to deliberate and reflect on key areas of special interest such as understanding global spill-over effects, estimating and forecasting in the presence of high volatility and structural breaks, analysing the impact of macroeconomic developments on distributional aspects, developing new information bases, and optimising the available information to improve the robustness of estimates.

Dr. Viral V. Acharya, Deputy Governor delivered the Theme Talk: A Case for Public Credit Registry in India. He noted that statistical techniques are an integral part of economic analysis and this fact is also reflected in the good share of "method awards" in the Nobel Memorial Prize in Economic Sciences. Dr. Acharya said that India's progress has been quite satisfactory under the G20 Data Gap Initiatives towards collection of better information and improved measurement of the build-up of risk in the financial sector, cross-border financial linkages, and vulnerability of domestic economies to shocks. As his primary message, Dr. Acharya emphasised the need for setting up a Public Credit Registry - an extensive database of credit information - for analysing, addressing and preventing in future the twin balance-sheet problems of banking and corporate sector. Reviewing the supervisory and statistical databases relating to bank credit, he said that linking them with financial results of the corporate sector and employing unique borrower-level identifiers could lead to incisive research and insights on monetary policy transmission to the real economy. The creation of a large public credit registry will help the supervisor to monitor delinquencies more effectively, bring in efficiency in the credit market by helping the lenders in appraisals and monitoring of the loan portfolio, and help the cause of financial inclusion of the small businesses and individuals by allowing them to establish their reputation via the registry.

Dr. Martine Durand, Chief Statistician and Director, OECD Statistics Directorate, delivered the keynote address on 'Economic Statistics for Policy and People - A Compass for the Next Two Decades'. She stressed upon the statistical challenges for quantitative measurement of the prevailing economic and policy environment. She hypothesized whether a measurement constraint on contribution of digitalization to the economy could provide an explanation for the lower growth in productivity in most of the OECD countries in the recent years. Her talk centred on measuring inclusive and sustainable growth and developing statistics to deduce accurate relationship among the economic variables. Discussing the limitations of GDP as a measure of well-being, she said that a broader perspective is necessary to understand the economy holistically. Reflecting on the statistical agenda going forward, Dr. Durand, in her address, highlighted challenges relating to (a) the impact of digitalisation on productivity; (b) globalisation in the context of supply chains and cross-border flows of intangibles and financial linkages; (c) economic disparities and vulnerabilities from a household perspective; and (d) economic well-being and environmental sustainability.

Prof. Chetan Ghate, of the Indian Statistical Institute, Delhi and member of Monetary Policy Committee (MPC) delivered a special lecture on The Indian Business Cycle. He discussed the phases and constituents of business cycle in India and the other emerging market economies. He also pointed out that, in the Indian context, a model with counter-cyclical government expenditures, pro-cyclical interest rates, counter-cyclical current account, and higher relative consumption volatility with suitable calibration may be more appropriate. He suggested that the framework for macro-economic stability should have a rigorous model of business cycle incorporating augmented labour market and asymmetric effects of monetary policy.

Prof. N. Balakrishna of Cochin University of Science and Technology delivered a special lecture on Statistical Modelling of Volatility in Financial Time Series. He discussed alternative statistical models such as observation-driven and parameter-driven models, used for analysing financial time-series. He emphasised the parameter-driven models with stochastic volatility in equity and foreign exchange markets where the volatility sequences are generated by suitable non-negative Markov sequences.

The panel discussion on the conference theme "New Frontiers on Statistical Methods and Information Base for Central Banks" was chaired by Dr. Dilip M. Nachane, Professor Emeritus, Indira Gandhi Institute of Development Research (IGIDR) and a member of the erstwhile Technical Advisory Committee on Monetary Policy (TACMP) of the Reserve Bank. The panel featured Dr. Dharmakirti Joshi, Chief Economist, CRISIL; Dr. Samiran Chakraborty, Chief Economist for India, Citibank; and, Ms. Pranjul Bhandari, Chief India Economist, HSBC. Prof. Nachane discussed modelling issues in central banking and touched upon key issues affecting the DSGE models. The panelists discussed contemporary issues such as shortcomings in data related to employment, growth and inflation, conveying that a possible way forward may be through now-casting models and alternative indices to supplement GDP figures. The panel observed that the growing digital economy in the country could be leveraged for getting more real-time information on the macroeconomy. The Panel also emphasised the importance of statistical models in policy making. It stressed that regular compilation and release of seasonally adjusted macroeconomic series, monetary conditions index, sacrifice ratio, productivity estimate, etc., would aid deeper analysis of the economy.

Earlier, Shri Chetan Bhagat, noted author and a former investment banker, delivered the Pre-conference talk on 'Managing Change' where he emphasized through a tour of his own career as an "authorpreneur" that receptiveness, adaptiveness and pro-activity are key to positive change. He said that while individuals can work on their core strength areas, change in social culture is more effective in bringing about an overall improvement to the society.

Tags : DISCUSSION STATISTICAL METHODS CONFERENCE