Threshold Level of Inflation – Concept and Measurement

Threshold Level of Inflation – Concept and Measurement

DRG Study No. 45: Threshold Level of Inflation – Concept and Measurement

The Reserve Bank of India today released on its website the DRG Studytitled, “Threshold Level of Inflation – Concept and Measurement”. The study is co-authored by Professor Ravindra H. Dholakia, Dr. Jai Chander, Smt. Ipsita Padhi and Shri Bhanu Pratap.

The study examines the concept of threshold inflation and defines it as the long run equilibrium rate of inflation that maximises the steady state growth within the relevant range of values. The empirical findings of the study broadly confirm higher threshold inflation and higher growth in emerging market economies than in advanced economies.

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∗: Development Research Group (DRG) has been constituted in Reserve Bank of India in its Department of Economic and Policy Research to undertake quick and effective policy-oriented research backed by strong analytical and empirical basis, on subjects of current interest. DRG studies are the outcome of collaborative efforts between experts from outside Reserve Bank of India and the pool of research talent within the Bank. These studies are released for wider circulation with a view to generating constructive discussion among professional economists and policy makers. DRG Studies are published on RBI website only and no printed copies will be made available

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