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October 01, 2019

How Much of a Monetary Boost Will We See from the RBI?

In this article by Sushant Hede on Wire, Niranjan Rajadhyaksha's column on using Taylor rule for an appropriate repo rate is quoted in the context of examining the impact of rate cuts on the Indian economy. 

 

Excerpt below: 

 

“Taylor Rule” to suggest that India’s repo rate should be around 4%. The Taylor Rule, which works on a number of assumptions, helps in arriving at the repo rate based upon a host of variables – neutral interest rate (assumed to be 1.25%), output gap, inflation gap and equal weights given to interest and growth numbers." 

 

Read the column and the article here

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