RBI paper measures optimum inflation threshold
A Reserve Bank of India paper, published on Monday, says policymakers should set an inflation target that is lower than the current 6% threshold level adopted by the central bank.
Sitikantha Pattanaik and GV Nadhanael, the paper's authors, use estimates of inflation in India to highlight why persistent generalised inflation at above the threshold level is a downside risk to the growth trajectory. The paper discusses multiple channels through which inflation could impede growth and outlines in
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