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Early warnings of inflation in India

Author

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  • Bhattacharya, Rudrani

    (National Institute of Public Finance and Policy)

  • Patnaik, Ila

    (National Institute of Public Finance and Policy)

  • Shah, Ajay

    (National Institute of Public Finance and Policy)

Abstract

In India, year-on-year percentage changes of price indexes are widely used as the measure of inflation. In terms of monthly data, each observation of a one-year change in inflation is the sum of twelve one month changes. This suggests that better information about inflationary pressures can be obtained using point-on-point monthly changes. This requires seasonal adjustment. We apply standard seasonal adjustment procedures in order to obtain a point-on-point seasonally adjusted monthly time-series of inflation in India. In three interesting high inflation episodes { 1994-95, 2007 and 2008 - we find that this data yields a faster and better understanding of inflationary pressures.

Suggested Citation

  • Bhattacharya, Rudrani & Patnaik, Ila & Shah, Ajay, 2008. "Early warnings of inflation in India," Working Papers 08/54, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:08/54
    Note: Working Paper 54, 2008
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    References listed on IDEAS

    as
    1. Pierce, David A & Grupe, Michael R & Cleveland, William P, 1984. "Seasonal Adjustment of the Weekly Monetary Aggregates: A Model-based Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(3), pages 260-270, July.
    2. Bell, William R & Hillmer, Steven C, 1984. "Issues Involved with the Seasonal Adjustment of Time Series: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 343-349, October.
    3. Bell, William R & Hillmer, Steven C, 1984. "Issues Involved with the Seasonal Adjustment of Economic Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 291-320, October.
    4. Raghuram G. Rajan, 2008. "Draft Report of the Committee on financial Sector Reforms," Working Papers id:1463, eSocialSciences.
    5. Harvey, Andrew & Koopman, Siem Jan & Riani, Marco, 1997. "The Modeling and Seasonal Adjustment of Weekly Observations," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(3), pages 354-368, July.
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    Cited by:

    1. Nadhanael G V & Sitikantha Pattanaik, 2010. "Measurement of Inflation in India: Issues and Associated Challenges for the Conduct of Monetary Policy," Working Papers id:2822, eSocialSciences.
    2. Bhattacharya, Rudrani & Pandey, Radhika & Patnaik, Ila & Shah, Ajay, 2016. "Seasonal adjustment of Indian macroeconomic time-series," Working Papers 16/160, National Institute of Public Finance and Policy.
    3. Ila Patnaik & Ajay Shah, 2009. "The difficulties of the Chinese and Indian exchange rate regimes," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 6(1), pages 157-173, June.
    4. Ila Patnaik & Ajay Shah, 2012. "Asia Confronts the Impossible Trinity," Chapters, in: Masahiro Kawai & Peter J. Morgan & Shinji Takagi (ed.), Monetary and Currency Policy Management in Asia, chapter 7, Edward Elgar Publishing.
    5. Bhattacharya, Rudrani & Patnaik,Ila, 2014. "Monetary policy analysis in an inflation targeting framework in emerging economies: The case of India," Working Papers 14/131, National Institute of Public Finance and Policy.
    6. Paunic, Alida, 2009. "I did it my way," MPRA Paper 17547, University Library of Munich, Germany.

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