SC: Confirmation of an Auction Sale Does Not Bar Judicial Scrutiny of Reserve Price Valuation  ||  Supreme Court Sets Aside Conviction of Four Men in a 1998 Gang Rape Case  ||  Supreme Court: Privy Purse Privileges of Princely Rulers are Not Enforceable Legal Rights  ||  Delhi HC: Repeated Court Summons May Distress and Re-Traumatize Child Sexual Assault Victims  ||  Jammu and Kashmir High Court: Labeling Someone as a Terrorist Associate Amounts to Defamation  ||  Delhi HC: Setting Aside or Altering a Judge’s Order by a Higher Court Doesn’t Affect Their Integrity  ||  Delhi High Court: Accused Cannot be Faulted For Smart Replies; Interrogator Must be Sharper  ||  Supreme Court: Belated Jurisdictional Challenge Impermissible After Participation in Arbitration  ||  Supreme Court: Failure to Prove Specific Overt Acts of Each Unlawful Assembly Member Not Fatal  ||  Supreme Court: Parental Salary Alone Cannot Determine OBC Creamy Layer Status    

RBI Working Paper No. 10/2020: Are Food Prices Really Flexible? Evidence from India- (Reserve Bank of India) (23 Sep 2020)

MANU/RPRL/0133/2020

Banking

The Reserve Bank of India today placed on its website a Working Paper titled "Are Food Prices Really Flexible? Evidence from India" under the Reserve Bank of India Working Paper Series1. The paper is authored by GV Nadhanael.

The paper looks at the price setting behaviour in food sector in India using a novel micro level dataset. The paper reaffirms that contrary to the conventional notion of flexible prices, food prices in India exhibit varying degrees of price stickiness, documenting evidence for heterogeneity in price stickiness being driven by product group characteristics and spatial variation of price stickiness. The paper also shows that the price setting behaviour in food sector broadly matches predictions of sticky price models. A calibrated menu cost model for Indian food prices shows that differences in productivity processes, market power and menu costs could account for the differences in price stickiness across product groups. The paper computes a measure of sticky food inflation - based on a stickiness re-weighted food price index - to show that it does not perfectly align with the conventional measure of core inflation (i.e., CPI excluding food and fuel). This highlights why paying attention to the sticky component of food inflation - besides core inflation - is important for the conduct of monetary policy in India.

Tags : WORKING PAPER   FOOD PRICES   FLEXIBILITY  

Share :        
The paper looks at the price setting behaviour in food sector ... For read more news from newsroom.manupatra.com"data-action="share/whatsapp/share" class="ic_wtsp-grid">

Disclaimer | Copyright 2026 - All Rights Reserved