India's Monetary Policy Framework - Rituals and Lion Tamers
(The following article appeared on CNBC TV18 online, link per below: https://www.cnbctv18.com/finance/rbi-rbi-monetary-policy-mpc-inflatio-repo-rate-the-monetary-policy-framework-of-rituals-and-lion-tamers-rbi-rbi-monetary-policy-mpc-inflation-repo-rate-3560261.htm ) The Monetary Policy Framework – Of Rituals & Lion Tamers Over the next few days, the bimonthly monetary policy ritual will play out. Our brightest economic minds – including the six high priests of the Monetary Policy Committee (MPC) - will first hazard where Consumer Price Index (CPI) inflation and GDP growth are headed. Interspersed with mantras such as output gap, exogenous and endogenous factors, core and headline inflation and suchlike, they will then suggest the appropriate policy interest rate action to keep CPI inflation in check, while fostering growth. If we step back, however, there is much to ponder. Does the MPC framework really work the way one would expect? Are we adequately debating all th