All HC: Municipal Corp. to Ensure Availability of Clean Drinking Water to Residents of Lucknow  ||  Bom. HC: Bail Granted to Accused Who Wasn’t Produced Before Court on Seventy Previous Dates  ||  Delhi HC Seeks Explan. from Legal Services Committee on Failure to Assist Litigant Despite Requests  ||  Hemant Soren, Former CM of Jharkhand Moves SC After HC Dismissed Challenge to His Arrest by ED  ||  CESTAT: No Provision in Cenvat Credit Rules to Allow Cash Refund of Cess in Cenvat Credit Balance  ||  Delhi High Court: Parents to Bear Cost of Air Conditioning Services in Schools  ||  Ker. HC: Declining a Rape Victim to Terminate Pregnancy Violates Right to Live With Dignity  ||  SC: Can’t Apply Section 498A IPC Mechanically in All Cases of Ill-Treatment by Husband  ||  SC: To Summon Person u/s 319 CrPC as Additional Accused, Stronger Evidence is Needed  ||  SC: Trial Judges Should Take Participatory Role in Trial & Not Act as Mere Tape Recorders    

RBI Working Paper No. 05/2020: Core Inflation Measures in India - An Empirical Evaluation using CPI Data- (Reserve Bank of India) (12 May 2020)

MANU/RPRL/0075/2020

Banking

Today the Reserve Bank of India placed on its website a Working Paper titled "Core Inflation Measures in India - An Empirical Evaluation using CPI Data" under the Reserve Bank of India Working Paper Series. The paper is co-authored by Janak Raj, Sangita Misra, Asish Thomas George and Joice John.

This paper assessed eleven possible candidates for their suitability as measures of core inflation in India based on Consumer Price Index (CPI) (2012=100) for the period 2012 to 2019. These included six exclusion-based measures, viz., (i) CPI excluding food and fuel; (ii) CPI excluding food, petrol and diesel; (iii) CPI excluding food, fuel, petrol and diesel; (iv) CPI excluding food, petrol, diesel, gold and silver; (v) CPI excluding food, fuel, petrol, diesel, gold and silver; and (vi) CPI excluding food, fuel, petrol, diesel, gold, silver and housing and five statistical measures, viz., (i) median; (ii) 5 per cent trimmed mean; (iii) 10 per cent trimmed mean; (iv) 20 per cent trimmed mean; and (v) historical standard deviation. All these candidates were tested for the standard properties of core inflation, viz., ease of communication, equality of means, lower volatility, unbiasedness, revertability, co-integration and attraction conditions. Historical standard deviation-based measure satisfied all the properties of core inflation, except ease of communication - in general, use of statistical measures pose formidable challenges for monetary policy communication. All the six exclusion based measures satisfied all properties but revertability, i.e., headline inflation reverting to core inflation over the medium term. This was possibly due to a low food inflation episode from January 2017 to August 2019. Controlling for this time period, all the exclusion-based core inflation measures, other than CPI excluding food, fuel, petrol, diesel, gold, silver and housing, revert to headline inflation satisfying all the desirable properties of core inflation.

Tags : INFLATION   MEASURES   EVALUATION  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved