EconomyPrelims + Mains
Does Inflation Targeting Work in India? Explained
Inflation Targeting, which is a decade-old framework for India (4% CPI), is facing difficulties due to a flat Phillips curve, unanchored expectations, and supply shocks. Rate increases could negatively impact growth without reducing inflation. Future actions should include monetary policies and supply-side measures, better communication, fiscal coordination, and India-specific models.
