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Table of Contents
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S.No. Topic
1. Introduction
2. Costs of Inflation
3. Price Indices
4. Causes of inflation
5. Inflationary Trend in India
6. Policies to control Inflation
7. Inflation : A necessary Evil
8. Lessons Learnt and Way Ahead
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Executive Summary
In the following paper, an attempt has been made to examine the nature
and causes of inflation, in the general context as well as with respect to
India. We have covered the various types of inflation, the detrimental
impact of inflation to an individual and economy as well as measures of
inflation. With respect to the price indices, we have examined the
advantages and disadvantages of the two price indices namely CPI and
WPI and provided an analysis of both in the Indian context.
The causes of inflation are many, but we have focused on those relevant
to the Indian economy namely demand-pull, cost-push, expectation
induced and fiscal deficit. We have given an account of the inflationary
trend in India over the past 18 months and analysed the same in five
phases.
We have also examined the role of fiscal policy and monetary policy in
controlling and managing inflation. The policies and tools used by the
government of India in recent times have been focused upon and their
impact on inflation in India has been analysed.
Lastly we have tried to give a holistic explanation of the nature of inflation
by looking at why inflation is necessary and the benefits of moderate
inflation rates.
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1. Introduction:
What Is Inflation?
Inflation is defined as a sustained increase in the general level of prices
for goods and services. It is measured as an annual percentage increase.
As inflation rises, every dollar you own buys a smaller percentage of a
good or service. The value of a dollar does not stay constant when there is
inflation. The value of a dollar is observed in terms of purchasing power,
which is the real, tangible goods that money can buy. When inflation goes
up, there is a decline in the purchasing power of money. For example, if
the inflation rate is 2% annually, then theoretically a $1 pack of gum will
cost $1.02 in a year. After inflation, your dollar can't buy the same goods
it could beforehand
Variants of Inflation
Deflation is when the general level of prices is falling. This is the
opposite of inflation
Disinflation, represents a period when the inflation rate is positive,
but declining over time
Hyperinflation is unusually rapid inflation. One of the most notable
examples of hyperinflation occurred in Germany in 1923, when
prices rose 2,500% in one month
Stagflation is the combination of high unemployment and
economic stagnation with inflation. This happened in industrialized
countries during the 1970s, when a bad economy was combined
with OPEC raising oil prices
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2. Costs of Inflation :
Price inflation has immense effect on the Time Value of Money
(TVM)1. This acts as a principal component of the rates of interest,
which forms the basis of all TVM calculations. The real or estimated
changes occurring in the rates of inflation lead to changes in the
rates of interest as well.
Relative price variability- Inflation distorts relative prices. Consumer
decisions are distorted, and markets are less able to allocate
resources to their best use
Inflation-Induced Tax Distortion- Inflation exaggerates the size of
capital gains and increases the tax burden on this type of income.
With progressive taxation, capital gains are taxed more heavily.
Arbitrary Redistribution of Wealth - Unexpected inflation
redistributes wealth among the population in a way that has nothing
to do with either merit or need
Competitiveness and Unemployment2 - Inflation is a possible cause
of higher unemployment in the medium term if one country
experiences a much higher rate of inflation than another, leading to
a loss of international competitiveness and a subsequent worsening
of their trade performance
1 http://www.economywatch.com/inflation/effects.html
2 http://tutor2u.net/economics/revision-notes/a2-macro-consequences-of-inflation.html
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3. P rice Indices
The inflation rate is the percentage increase in the overall level of prices.
An inflationary situation does not mean that all prices are rising without
exception. Since many goods & services are produced in economy, some
prices may actually be falling and others may be rising at any point of
time. But if the price of only one/very few goods goes up, then it is not
inflation. It is inflation; if the prices of most goods go up. A price index is a
measure of the average level of prices for some specified set of goods and
services, relative to the prices in a specified base year.
Different prices indexes are:
1. Consumer price index
2. Wholesale price index
CPI:
A consumer price index (CPI) measures changes in the price level
ofconsumer goodsand services purchased by households. CPI is a
measure of inflation based on what average consumer pays. It measures
cost of buying a fixed basket of goods and services by consumers. The CPI
is a weighted average of prices. The weight on each price reflects that
goods relative importance in the CPIs basket. The weights remain fixed
over time. This is a measure of the average change over time in the prices
paid by consumers for a market basket of consumer goods and services.
Hhousehold survey is conducted to find out consumption of a typical
household. CPI is released on monthly basis. It is used to
track changes in the typical households cost of living
adjust many contracts for inflation
allow comparisons of currency from different years
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The CPI is a statistical estimate constructed using the prices of a sample
of representative items whose prices are collected periodically. Sub-
indexes are computed for different categories of goods and services,
being combined to produce the overall index with weights reflecting theirshares in the total of the consumer expenditures covered by the index.
The annual percentage change in a CPI is used as a measure ofinflation.
A CPI can be used to index (i.e., adjust for the effect of inflation) the real
value of wages, salaries, pensions, for regulating prices and for deflating
monetary magnitudes to show changes in real values.
The four consumer price indices are: CPI-IW for industrial workers, CPI-
UNME for non-manual employees, CPI for agricultural laborers and CPI for
rural laborers.
Linked all- India CPI (UNME) on base 1984-85=100 for April-2010
Group
UNM
E
weigh
t
Linked
index for
April
-2010
Index for
April
-2009
%
chang
eI Food, beverages, tobacco 47.13 691 602 14.8
II Fuel and light 5.48 655 625 4.8
III. Housing 16.41 775 582 33.2
IV. Cloth., bedding and
footwear 7.03
494
471
4.9
V. Miscellaneous 23.95 599 568 5.5General Index ( all
groups)
100.0
0
667
583
14.4
CPI-IW used for wage indexation in Government and in the organized
sectors (2001 as base year).CPI UNME series is published by the Central
Statistical Organization, the others are published by the Department of
Labour.
WPI:
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The wholesale price index (WPI) is calculated based on the wholesale
price of a few relevant commodities of over 2,400 commodities available.
The commodities chosen for the calculation are based on their importance
in the region and the point of time the WPI is employed. Like CPI, WPI is ameasure of cost of a given basket of goods. WPI is an economy-wide index
covering 676 commodities. Weights of the commodities are derivedbased
on the value of quantities traded in the domestic market .It is, therefore,
the most comprehensive measure of economy-wide inflation available
with high frequency.CPI measures prices at retail level, WPI is constructed
at wholesale level. WPI measures average level of prices of goods sold by
producers.WPI is useful because it gives us an idea of what will happen to
consumer prices in the near future.it signals changes in CPI/general price
level. If producers receive higher prices from sale to wholesalers, then
retailers will charge higher prices, which will reflect in CPI.WPI is released
on weekly basis. In India, we use WPI as our official measure of inflation.
India constituted the last WPI series of commodities in 2004-05.
How to Calculate:
Laspeyres Formula (relative method)
It is the weighted arithmetic mean based on the fixed value-based
weights for the base period.
Ten-Day Price Index
Under this method, sample prices with high intra-month fluctuations are
taken and surveyed every ten days. Utilizing the data retrieved by this
procedure and with the assumption that other non-surveyed "sample
prices" remain unchanged, a "ten-day price index" is compiled and
released.
Calculation Method
Monthly price indexes are compiled by calculating the simple arithmetic
mean of three ten-day sample prices in the month.
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Description
Weights
1981-
82
1993-
94
2004-
05
I. Primary Articles 32.30 22.02 20.1
II. Fuel, Power,
Light & Lubricant 10.66 14.23 14.9
III. Manufactured
Products 57.04 63.75 64.9
All Commodities 100 100 100
Comparison
Comparison between CPI & WPI:
Publish Timing: CPI takes time to get published (monthly). But, WPI
is released on weekly basis.
Transparency: WPI data is more transparent compared to CPI data
CPI for all commodities taken together is not available! Non-
transparency has encouraged mistrust of CPI.
Effectiveness: CPI measures increase in price that a consumer will
ultimately have to pay for. But WPI not.
Many commodities included in WPI have ceased to be important
from consumption point of view.
Weightage Difference: In WPI, fuel group gets a much higher
weightage and services not included. In CPI, food gets maximum
weightage.
Coverage: WPI differs from CPI in coverage - e.g. WPI includes raw
materials and semi-finished goods.
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The Divergent behaviour of WPI & CPI:
The difference in behaviour of to inflation measures is due to the variation
in prices of various groups of articles and their weight indices. As shown
above, sharply different trend in both measures is due to volatility in food
and fuel prices and due to their different weights. In CPI weight of food
particles is more so due to rise in price of food particles, the CPI index
rises. But in case of WPI, the major portion is fuel and energy so the price
of fuel and energy went down during recession and the WPI index went
down.
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4. Causes of inflation
Demand-Pull [1]
An increase in the aggregate demand of an economy when there is full
employment of resources and when the short-run aggregate supply curve
is inelastic leads to excess demand or an output gap and can be referred
to as demand pull inflation. This is often the cause of inflation in growing
economies like India where expansions in the government and private
sector lead to increased incomes and therefore increased purchasing
power of the people.
The most common causes for demand-pull inflation are as follows:
1. Increases in the money supply - Monetarist economists believe
that the root causes of inflation are monetary especially when there
is an excessive growth of the supply of money in circulation beyond
that needed to finance the volume of transactions produced in the
economy
2. Direct or indirect decreases in taxes - If direct taxes are
reduced consumers have more real disposable income causing
demand to rise.
3. Increases in government spending Increase in government
spending will lead to an increase in income which will lead to an
increase in aggregate demand.
4. Depreciation of the exchange rate - the effect of increasing the
price of imports and reduces the foreign price of UK exports. If
consumers buy fewer imports, while foreigners buy more exports,
AD will rise.
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When the supply side cannot grow at a similar rate, scarcity of goods will
occur and a supply-demand mismatch will lead to a price increase.
[1]
Cost Push Inflation [2]
Cost-push inflation occurs when businesses respond to rising production
costs, by raising prices in order to maintain their profit margins. Higher
costs may be due to:
1. Higher cost of raw materials Imported goods may be costlier
because of inflation in other countries. Scarcity of resources also
leads to higher price of raw materials.
2. Rising labour costs As the wage rates rise, cost of production
rises as well
3. Increase in direct or indirect taxes - . These taxes are levied on
producers (suppliers) who, depending on the price elasticity of
demand and supply for their products, can opt to pass on the
burden of the tax onto consumers.
India has faced supply-side inflation with respect to the agricultural sector
in recent times which has propelled food inflation into double digits.
During April to March 2010-11 food prices went up 11.24 per cent and fuel
prices 12.27 per cent over the previous financial year. [3] The ineffective
public distribution system as well as the rising fuel prices and declining
agricultural productivity have led to food supply shocks.
In addition, rising international commodity prices seem to be instrumental
in driving domestic inflation in the long run. [4]
Expectations
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Sustained high levels of inflation have given way to rising inflation
expectations. According to the RBIs recent survey on inflation
expectations, urban households in India do not expect any immediate
respite from price rise and a majority of them feel it would accelerate inthe coming quarters. According to this survey, inflation is likely to
accelerate to 13.1 per cent by the end of this year. This means, going
forward, there will be stronger demand for wages hikes in the organised
sector, with its spillover effect on generalised inflation. [3]
[2] < http://blog.apnapaisa.com/tag/demand-pull-inflation / >[3] [4] What Drives Inflation in India: Overheating or Input Costs?(Hatekar, Sharma,
Kulkarni)
Fiscal Deficit
High fiscal deficit means that that the government has incurred a large
debt. In order to finance this debt, the government borrows money from
the RBI. This is known as monetization of debt and leads to an increase in
money supply. This in turn leads to demand-pull inflation.
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1. Inflationary Trends in India
Looking at inflation data3 at the disaggregated level throws up an
interesting trend. For most part of the year 2010, it was the Primary
Articles segment which contributed substantially to overall inflation.
Further, within the Primary Articles segment, it was Food Articles where
inflation was at an uncomfortably high level throughout 2010. However,
beginning 2011, we see that the contribution of the other two broad
segments, namely Fuel & Power and Manufactured Goods, to overall
inflation
has gone up swiftly while that of Primary Articles has come down. It is
however important to note that while inflation in case of Food Articles
may be trending down, it is still high for any comfort. Further, while
inflationary pressures seen in case Fuel and Power can be attributed to
the increase in prices of items like petrol and coal, the buildup of
inflationary pressure in manufactured goods is largely the result of rising
prices of raw materials and industrial inputs and which are being passed
on by manufacturers in the final prices of their products.
Let us now look at the phase wise inflationary trends4 in India over the
past 18 months
3 Current State of IndianEconomy , June 2011
4 Speech by Mr Deepak Mohanty , Executive Director of the Reserve Bank of India, atthe Indian Institute of Technology (IIT), Guwahati, 3 September 2011
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This phase was marked by slowing down of price pressu
There was a slowdown in overall IIP growth
The trend of moderating inflation and consolidating gro
Bank
Liquidity continued to remain in deficit , rates in all the
The moderately declining trend in inflati
Spurt in food inflation as unseasonal rain
Stronger than expected pass-through o
High global commodity prices and their l
persist
Evidence of demand pressure from incre
P hase- wise trend of inflation from October ,09 to present
Phase I October 2009March 2010 Phase II
AprilJuly 2010
Phase III AugustNovember 2010 Phase IV December
2010 onwards
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er cent in October 2009 to above 10 per cent by March 2010
200910, which adversely affected the food prices
this period. Manufactured non-food products inflation also reverted to its medium-term trend
this phase
be increased to bring them to the pre crisis level
Year-on-year WPI inflation remained stubborn around 10 per cent and the index advanced by 3.
High Food prices especially from protein rich food(supply side constraint) and rising petroleum
While the level of inflation had increased, industrial production was showing a declining trend
Weak US recovery and concerns over sovereign debt sustainability in euro area during this peri
Policy rates were raised thrice and the CRR was raised once
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1. Policies to Control Inflation:
An important point to consider is that inflation comes from more than one
source. Rising prices are not simply the result of increasing aggregatedemand but also of higher costs of production and the direct and indirect
effects of changes in government policies. It is also important to note that
many inflationary impulses come from outside the domestic economy -
namely from external shocks in the global economic system - many of
which an individual country has no control to change.
Thinking about the domestic economy, inflation can be reduced by
policies that
1. slow down the growth of aggregate demand (AD) or
2. boost the rate of growth of aggregate supply (AS)
The main anti-inflation controls available to a government are:
Fiscal policy:
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If the government believes that aggregate demand is too high, it may
choose to tighten fiscal policy by reducing its own spending on public
and merit goods or welfare payments. Or it can choose to raise direct
taxes, leading to a reduction in real disposable income. These fiscalpolicies increase the rate of leakages from the circular flow and reduce
injections into the circular flow of income and will reduce demand pull
inflation.
The consequence may be that demand and output are lower which has an
effect on jobs and real economic growth in the short-term. A fiscal
tightening will have the effect of reducing the size of the budget deficit.
Hence it is not a preferred measure to combat inflation.
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Supply side economic policies and government initiatives:
Supply side policies include those that seek to increase productivity,
competition and innovation all of which can maintain lower prices. These
are important ways of controlling inflation in the medium term. If the
economy can raise its underlying growth rate, then a higher level of
aggregate demand can be sustained without leading to acceleration in the
rate of inflation.
A very effective way to reduce the cost push inflation is also by direct
intervention by government or prices and incomes' policy. This is when
government takes measures to restrict the increase in wages (incomes)
and prices.
There are two types of direct intervention:
Statutory - government freezes wages and prices; and
Voluntary - government tries through argument and persuasion to
make firms adopt smaller prices and wages.
The problems with direct intervention are:
The confrontation with trade unions and employers.
Also because the prices are much more easily controlled in public
sector, it tends to discriminate in favour of private sector.
It also distorts market forces, since expanding sectors can't find any
new workers, because of the low price, whereas declining sectors
hold on to theirs.
This policy also tends not to take account the differentials, usually
flat base policy is used (e.g. every worker can get a pay rise of Rs.4
a week), which is unfair to people earning higher salaries as their
percentage pay rise is much smaller.
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Direct intervention policy is more effective in short-term, but it stores up
trouble for the future, because prices tend to rise rapidly as soon as the
policy is abandoned.
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Monetary policy:
A tightening of monetary policy involves the central bank taking a series
of measures to reduce consumer and investment spending. Monetary
policy is designed mainly to control demand-pull inflationary pressures.
The primary measures followed by the central bank are as follows:
Bank Rate Policy: Increase rate at which RBI lends to other banks
(repo rate) and hence the rate at which banks lend to the
customers.
Open Market Operations: Sell government securities and price
bonds in open market to reduce money supply in the market.
Variable Reserve Ratio: Increase the CRR and SLR Ratios
Demonetization of Currency: To reduce black money
Issue of New Currency: Most extreme step
However the most common mechanism used is the interest rate. It is both
the most effective and the most convenient measure to control inflation
so far.
Monetary policy thus can control the growth of demand through an
increase in interest rates and a contraction in the real money supply.
The effects of higher interest rates are as follows.
Higher interest rates reduce aggregate demand in three main ways;
Discouraging borrowing by both households and companies
Increasing the rate of saving (the opportunity cost of spending
has increased)
The rise in mortgage interest payments will reduce homeowners'
real 'effective' disposable income and their ability to spend.
Increased mortgage costs will also reduce market demand in the
housing market
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Business investment may also fall, as the cost of borrowing funds will
increase. Some planned investment projects will now become unprofitable
and, as a result, aggregate demand will fall.
Higher interest rates could also be used to limit monetary inflation. Arise in real interest rates should reduce the demand for lending and
therefore reduce the growth of broad money.
Indirectly, high interest rates lead to reduced business borrowings, thus
causing reduction in output. This leads to reduced income and hence
reduced demand.
The most appropriate way to control inflation in the short term is for the
government and the central bank to operate fiscal and monetary policy to
keep control of aggregate demand to a level consistent with our
productive capacity.
The standard consensus among economists (until recently) has been that
aggregate demand is probably better controlled through the use of
monetary policy rather than an over-reliance on using fiscal policy as an
instrument of demand-management. But in the long run, it is the growth
of a countrys supply-side productive potential that gives an economy the
flexibility to grow without suffering from acceleration in cost and price
inflation.
Governments response to inflation in India
Governments main response to the question of inflation has been to try and
manage it through monetary measures. As a result, it has hiked rates 13 times in
the last 19 months! This is reflected in the fact that the RBI increased all keyrates (like Cash Reserve ratio, repo rate etc) in the economy which was followed
by the banks raising the interest rates for home loans and other loans. This is
done with the basic assumption that with an increase in the interest rate, the
demand in the economy will decrease and this will lead to a reduction in the
inflation rate.
Recent Policy Measures
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Monetary policy measures: The most recent changes were made during RBI's
Q2 review of monetary policy FY12 on October 25, 20111
1. Interest rate hikes: Repo rate hiked to 8.5% and reverse repo rate hikes to
7.5%. The RBI has also revised down its growth forecast for the fiscal year
ending in March to 7.6% from 8% with a downside bias earlier, while sticking
with its forecast that headline wholesale price index inflation will ease to 7% at
the end of the fiscal year.
2. Deregulation of savings bank interest rates with immediate effect: It
has also deregulated savings bank interest rates with immediate effect. Savings
bank account rate will be linked with the policy rate at which the central bank
lends short-term funds to commercial banks
Non Monetary Policy measures2:
1. Reduction of import duties on wheat, rice and pulses, a ban on the export
of non-basmati rice and the suspension of futures trading in rice, urad and
tur dal.
2. The government has extended the stock limit orders for pulses, paddy and
rice and reduced import duty on skimmed milk powder, among other
measures.
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Impact of the Monetary Policy3,4:
The monetary tightening effected so far by the Reserve Bank has helped in containing
inflation and anchoring inflationary expectations, though both remain at levels beyond
the Reserve Bank's comfort zone. Infract, India's food inflation rate fell significantly to 6.6
per cent for the week ended November 26, 2011
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Shortcomings of the policy5:
Cannot simultaneously simulate economic demand to reduce
unemployment and restrain demand to combat inflation
It is restricted by fiscal policy and other regulatory policies
Limited by supply side factors: Inadequate storage capacity to
store grains and agriculture produce
Transportation Measures needed to be addressed
Additional expenditure needed on part of the Government to check
rampant increase in food prices
Problems of inflexible labor market and inadequate infrastructure also
limit the effectiveness of monetary policy
This over reliance of the Government on the monetary instruments to resolve
every problem of the economy cannot work in long run. What is needed to tackle
the problems of the Indian economy is fiscal prudence coupled with increase in
purchasing power of the poor by increasing Government expenditure particularly
in the rural areas. The answer therefore lies in the struggle for an alternative set
of development policies.
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1. Why is inflation a necessary evil?
Ask any investment banker, policy maker, economist or any government,
about inflation, and you can see the expression of the face turning from
docile to a -hostile one. Such is the effect of the word inflation itself. But
as economists and realists we need to delve into the fact that if we want
our economy to grow, we have to take in count that inflation will poke his
head to haunt us and as opportunists we need to find out how we can use
inflation to our maximum benefit and is inflation itself bad for the
economy or is it a necessary evil.
Some of the benefits of inflation are
1. Money Creation We know that the government issues and
sells bonds, and spends the proceeds to account for government
spending and does not typically create money, but if the bonds
are bought by the central bank, which then creates or injects
money into the system to pay for them, the result is the same.
This revenue from money creation allow the government to
borrow less from public or to lower the taxes. But this advantage
is more relevant to countries with very high inflation rates.
2. More flexibility to fight recession - An economy with a higher
average inflation rate has more scope to use monetary policy to
fight recession as against an economy with a low average inflation
rate as the one with the low inflation rate may find itself unable to
use monetary policy to return output to the natural level of output
in case of recessionary times. Eg- United States, has low inflation
and low nominal interest rates and after the recession set in 2008,
the room for monetary policy to help avoid a decline in output was
clearly limited.
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3. Business Growth Controlled growth of inflation can be a boon
for us as when there is controlled inflation, people spend their
money on buying goods and services since they are afraid of
rising prices in the future and thus savings are frequently investedto avoid net loss when housed in banks leading to more output in
the market.
4. Avoid deflationary environment Lowering inflation has more
adverse effects as if inflation stoops down to deflationary levels, it
causes severe disadvantages of lower spending as there would be
an incentive to hold on to purchases when prices are falling,
liquidity trap as even lowering interest rates would be ineffective
in increasing demand, debt becomes an increasing burden
reducing spending and economic growth. So some amount of
inflation is absolutely necessary to keep the economy afloat.
Optimal inflation Rate
The debate in the OECD countries is largely between the rates of at least,
say 3-4% and the rate of 0% inflation. How much inflation is healthy for
the economy is the real question and depends on what kind of economy
we are.
Those who agree with the 4% minimum inflation rate give the reason as
the cost of inflation are comparatively small as against the benefits of
inflation and say some of the costs of inflation like shoe-leather costs,
inflation variability etc could be avoided by indexing the tax system and
issuing more indexed bonds or using inflation indexed bonds. Also
lowering inflation rate may result in unemployment in the short run which
in turn can lead to lowering down the benefits of lowering it down in the
first place.
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Economists in favor of price stability, aim for 0% inflation rate as the
prices would remain more or less the same over the year which eliminates
the scope for money illusion and money market volatility. But generally,
central banks worldwide are in the favor of low but positive inflationdepending on the type of economic development and the rates would lie
between 2% - 5% in different economies.
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1. Lessons learnt and the way ahead :
Some of the lessons learnt in our study are
1. The extent to which food price inflation affects consumer welfare
depends on the degree of price transmission. The degree of
transmission of world market prices to domestic prices is at the heart
of national food security policies and is cause of concern for us.
2. Price controls alone have not been not very effective at limiting food
price inflation as price controls negatively affect supply by creating
perverse incentives to producers.
3. Liberal trade policies benefit consumers as efforts to curtail food
exports rarely succeed, and they generate significant negative
externalities.
4. Public grain reserves have played an important role in dealing with the
food. Crisis as some observers have called for collective action on
stocks, whereby individual countries would set aside some of their
grain reserves as part of a new international coordinated global food
reserve managed by a highlevel committee.
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REFERENCES:
Policies to Control Inflation, Geoff Riley,
(http://tutor2u.net/blog/index.php/economics/comments/as-macro-
revision-policies-to-control-inflation/)
Economic policies to Control Inflation
http://tutor2u.net/economics/content/topics/inflation/controlling_inflatio
n.htm
How to Control inflation, Business Standard, 2 April 2008
Deepak Mohanty: Monetary policy response to recent inflation in India
Inflation and relative prices (article by Mihir Rikshit)
http://rbi.org.in/scripts/bs_viewcontent.aspx?Id=2430
http://articles.economictimes.indiatimes.com/2011-08-
18/news/29900601_1_food-inflation-annual-basis-rate-of-price-rise:
http://indusfinance.com/2011/06/17/impact-of-rbi-policy-rates-on-
inflation-a-critical-review/
http://businesstoday.intoday.in/story/loans-to-get-costlier-as-rbi-hikes-
key-rates-yet-again/1/18734.html
http://www.slideshare.net/CMVerma/rbi-monetary-policy
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