Template-Type: ReDIF-Paper 1.0 Author-Name: Pulapre Balakrishnan Author-Name-First: Pulapre Author-Name-Last: Balakrishnan Author-Email: pulapre.balakrishnan@ashoka.edu.in Author-Workplace-Name: pulapre.balakrishnan@ashoka.edu.in Author-Name: M Parameswaran Author-Name-First: M Author-Name-Last: Parameswaran Author-Email: parameswaran@cds.edu Author-Workplace-Name: Associate Professor, Centre for Development Studies, Thiruvananthapuram Title: What lowered inflation in India: Monetary policy or commodity prices? Abstract: India has seen lower inflation by historical standards, for the past five years. This has been attributed by some observers to the adoption of inflation targeting by the country’s central bank, the Reserve Bank of India. In particular, it has been asserted that the taming of inflation reflects the anchoring of expectations of it through inflation targeting. We evaluate these claims. Our estimates indicate that there is no basis to the claim that inflation has been lowered due to the anchoring of expectations. On the other hand, we are able to fully account for the trajectory of inflation in India in terms of an explanation of inflation other than the one on which inflation targeting is premised. length: 25 Creation-Date: 20211002 Revision-Date: Publication-Status: File-URL: https://dp.ashoka.edu.in/ash/wpaper/paper66_0.pdf File-Format: Application/pdf Number: 66 Keywords: India Keywords: Inflation models Keywords: Inflation targeting Keywords: Monetary policy Keywords: Structuralist macroeconomics Handle: RePEc:ash:wpaper:66