Archive for June 15th, 2010

What inflation should Fed target?

June 15, 2010

Fed is not an inflation targeting central bank but there are enough papers debating the issue. It was quite a debate before the crisis.

Now, when we talk about inflation targeting we get into macro ideas – how does it work, how it leads to lower inflation, how it makes central bank more independent and transparent etc. The questions don’t look at a major issue- what measure of inflation should be targeted?

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The growth report and new structural economics

June 15, 2010

Justin Yifu Lin and Célestin Monga of World Bank write an excellent paper on the topic.

Here is some background before I discuss the paper.

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Inflation May 2010 update

June 15, 2010

WPI index increased from 253.7 in April ’10 to 258.1 in May ‘10. This implied inflation for May ’10 at 10.16% (YoY), higher than market expectations of 9.43% (as per several polls).

 Inflation was higher as market participants expected a lower figure for the manufactured products sub-sector (explained below). For March ’10, inflation was revised upwards from 9.9% to 11.04%.  Once again inflation has been revised upwards significantly. 

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IIP April 2010 update

June 15, 2010

IIP for April 2010 was at 17.6% (y-o-y). It was much higher than market expectations of 13.8% (as per different newswires). The figure for March was revised upwards from 13.5% to 13.9%.

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Assorted Links

June 15, 2010

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