Supreme Court: Vacancies From Resignations under CUSAT Act Must Follow Communal Rotation  ||  Supreme Court: Forest Land Cannot Be Leased or Used For Agriculture Without Centre’s Approval  ||  Supreme Court: Gravity of Offence and Accused’s Role Must Guide Suspension of Sentence under CrPC  ||  Supreme Court: Arbitral Awards Cannot be Set Aside For Mere Legal Errors or Misreading of Evidence  ||  SC Acknowledges Child Trafficking as a Grave Reality and Issues Guidelines to Assess Victim Evidence  ||  Allahabad HC: When Parties Extend an Agreement by Conduct, The Arbitration Clause Extends Too  ||  Supreme Court: Issues of Party Capacity and Maintainability Must Be Decided by Arbitral Tribunal  ||  Supreme Court: Omissions in Chief Examination Can Be Rectified During Cross-Examination  ||  Supreme Court: Items Given by Accused to Police Are Not Section 27 Recoveries under Evidence Act  ||  Gujarat High Court: Waqf Institutions Must Pay Court Fees When Filing Disputes in State Tribunal    

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 2025 - All Rights Reserved