IDEAS home Printed from https://ideas.repec.org/a/jqe/jqenew/v10y2012i1p1-16.html

Speed of Adjustment and Inflation – Unemployment Tradeoff in Developing Countries – Case of India

Author

Listed:
  • Ravindra H. Dholakia
  • Amey A. Sapre

Abstract

This paper estimates the short-run aggregate supply curve for the Indian economy over the period 1950-51 to 2008-09. Methodological improvements in this paper include the technique of estimating adaptive expectations, constrained estimation consistent with long run equilibrium, and introduction of the extended Phillips curve. The study also attempts to investigate the question of speed of recovery and the choice of adjustment paths available to policymakers in face of adverse supply shocks. Contrary to previous studies, the present study finds a regular tradeoff between inflation and output or unemployment with inflationary expectations based on the experience of past three to four years. We also find that the subtle tradeoff between the rate of output recovery and inflation is negative in India thereby implying that a strategy of fast recovery is not likely to result in high inflationary pressures.

Suggested Citation

  • Ravindra H. Dholakia & Amey A. Sapre, 2012. "Speed of Adjustment and Inflation – Unemployment Tradeoff in Developing Countries – Case of India," Journal of Quantitative Economics, The Indian Econometric Society, vol. 10(1), pages 1-16, January.
    • Handle: RePEc:jqe:jqenew:v:10:y:2012:i:1:p:1-16
    as

    Download full text from publisher

    File URL: http://www.jqe.co.in/journals/jqe_v_10_n1_1.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kaushik Basu & C Marks, 2011. "Understanding Inflation and Controlling It," Working Papers id:4481, eSocialSciences.
    2. Ravindra H. Dholakia & Kadiyala Sri Virinchi, 2017. "How Costly is the Deliberate Disinflation in India? Estimating the Sacrifice Ratio," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(1), pages 27-44, March.
    3. Dholakia, Ravindra H. & Kadiyala Sri Virinchi, 2015. "How Costly is the Deliberate Disinflation in India? Estimating the Sacrifice Ratio," IIMA Working Papers WP2015-08-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    4. Ravindra H. Dholakia, 2020. "A Theory of Growth and Threshold Inflation with Estimates," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(3), pages 471-493, September.
    5. Dholakia, Ravindra H., 2014. "Cost and Benefit of Disinflation Policy in India," IIMA Working Papers WP2014-02-08, Indian Institute of Management Ahmedabad, Research and Publication Department.
    6. Dholakia, Ravindra H., 2014. "Sacrifice Ratio and Cost of Inflation for the Indian Economy," IIMA Working Papers WP2014-02-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    7. Dolly Singh & Nmp Verma, 2016. "Tradeoff between Inflation and Unemployment in the Short Run: A Case of the Indian Economy," International Finance and Banking, Macrothink Institute, vol. 3(1), pages 77-96, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jqe:jqenew:v:10:y:2012:i:1:p:1-16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: D. M. Nachane or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/tiesoea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.