Nitin Desai: On inflation targeting

It is just one element of the new architecture of macroeconomic policy. Much more is required to shore up the economy

Nitin Desai

The government has made a wise choice for the Reserve Bank of India (RBI) governor in Urjit Patel, who has the domain knowledge, experience and professional standing that the job demands. He has a reputation of being an inflation hawk, though his favoured avian identification is with a watchful owl! He now has the responsibility for implementing the Monetary Policy Framework Agreement (MPFA). Under this concordat, "…the objective of monetary policy is to primarily maintain price stability, while keeping in mind the objective of growth". Price stability, as measured by the ...