Research
CURRENT RESEARCH
Are Food Prices Really Flexible? Evidence From India (latest version)
This paper revisits the notion of flexibility of food prices by compiling a novel micro level dataset for India. It shows that food prices in India exhibit varying degrees of price stickiness across product groups. Furthermore, the price setting behaviour broadly matches predictions of sticky price models with menu cost. Model calibration shows that differences in productivity processes, market power and menu costs could account for the differences in price stickiness across product groups. Inflation based on a stickiness re-weighted food price index does not perfectly align with the conventional core measure of inflation (i.e., CPI excluding food and fuel). This highlights why paying attention to the sticky component of food inflation – besides core inflation – is important for the conduct of monetary policy in India.
In the news
"Stubborn Food Costs Too Hard to Ignore for India Policy Makers" Bloomberg
"Data on food price rigidities can serve as inputs for RBI decisions" Livemint
PUBLICATIONS
Rath, Deba Prasad, G. V. Nadhanael and Shobhit Goel (2023). Assessing Oil Price Trajectory: An Evaluation of Alternate Sources of Information. RBI Bulletin, December. 77.12
Pattanaik, Sitikantha, G. V. Nadhanael, and Silu Muduli (2023). "Taming Inflation by Anchoring Inflation Expectations." Economic and Political Weekly 58.22: 33-41.
Patra, M. D., George, A. T., G.V Nadhanael, and John, J.[A1] (2022). Anatomy of Inflation’s Ascent in India. RBI Bulletin, December. 76.12
Muduli, Silu, G. V. Nadhanael, and Sitikantha Pattanaik (2022). "Assessing Inflation Expectations Adjusting for Households’ Biases." RBI Bulletin 76.12: 97-107.
Lowe, M., G. V. Nadhanael and Roth, B. N. (2021). India’s food supply chain during the pandemic. Harvard Business School Working paper and Food policy, 105, 102162.
Mehrotra A., Nadhanael G.V. (2016) Financial Inclusion and Monetary Policy in Emerging Asia. In: Gopalan S., Kikuchi T. (eds) Financial Inclusion in Asia. Palgrave Studies in Impact Finance. Palgrave Macmillan, London
G. V. Nadhanael (2014) “Recent Trends in Rural Wages in India: An analysis of Inflationary Implications” RBI Occasional Papers Vol. 33 - No. 1.
Sitikantha Pattanaik and G.V. Nadhanael (2013), “Why persistent high inflation impedes growth? An empirical assessment of threshold level of inflation for India”, Macroeconomics and Finance in Emerging Market Economies, Vol.6 No.2.
G. V. Nadhanael and Sitikantha Pattanaik (2010) “Measurement of Inflation in India: Issues and Associated Challenges for the Conduct of Monetary Policy” RBI Staff Study -5/2010.
WORKING PAPERS
G V Nadhanael (2020). Are Food Prices Really Flexible? Evidence from India RBI Working Paper 10/2020.
Benes, Mr Jaromir, Kevin Clinton, Asish Thomas George[A2] , Joice John, Ondra Kamenik, Mr Douglas Laxton, Pratik Mitra, G. V. Nadhanael, and Hou Wang. Inflation-Forecast Targeting for India: An Outline of the Analytical Framework. International Monetary Fund, 2017.
Benes, Mr Jaromir, Kevin Clinton, Asish Thomas George, Pranav Gupta, Joice John, Ondra Kamenik, Mr Douglas Laxton, Pratik Mitra, and G. V. Nadhanael. Quarterly projection model for India: Key elements and properties. International Monetary Fund, 2017.
PRESENTATIONS/UNPUBLISHED
International Conference on Economic Reforms, Growth and Sustainable Development, Central University of Kerala, Kasargod February, 2015, paper on “Regional Dynamics of Inflation in India” jointly with Rakesh Kumar.
BIS Annual Research Network Conference (ARN), Manila, March 2013, paper on “Inflation Dynamics and Commodity Price Movements: Challenges for Monetary Policy in India” jointly with B.M Misra.