tag:blogger.com,1999:blog-19649274.post1719093516598422800..comments2024-03-27T17:16:12.789+05:30Comments on The Leap Blog: India needs an `inflation report'Ajay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-19649274.post-35848278451375378942008-06-06T09:48:00.000+05:302008-06-06T09:48:00.000+05:30Inflation measurement, like much of the statistica...Inflation measurement, like much of the statistical system, suffers from the `public goods' problem. Knowledge is non-rival and non-excludable. Once a fact - this month's CPI - is out, it costlessly flows from one person to another. It is hard to restrict one additional person from knowing the CPI.<BR/><BR/>An agency like CMIE would hence find it difficult to recoup the costs of producing a CPI. When large databases are involved - e.g. firm level data - there is a good degree of excludability and it's possible to have the private sector build a statistical system. But when it comes to the prominent macroeconomic time-series like CPI or unemployment or consumer confidence or IIP, this is hard.Ajay Shahhttps://www.blogger.com/profile/03835842741008200034noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-12698675799452542552008-06-06T00:03:00.000+05:302008-06-06T00:03:00.000+05:30I do think there are many private (international, ...I do think there are many private (international, to the best of my knowledge) firms that do such analysis. But their data is often exclusive. Consensus Forecasts is one example. Going back to what Ajay said, I completely agree that there needs to be better presentation/dissemination of what the RBI thinks/wants to happen to inflation - beginning with a clearer measure of it, moving to a specific forecast that is published in a regular format that can be compared across different reports, and presenting the foreseen impact of this on growth and employment.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-520617817487073242008-06-05T23:22:00.000+05:302008-06-05T23:22:00.000+05:30If it's so cheap, why isn't a private econometric ...If it's so cheap, why isn't a private econometric firm doing it? Surely RBI and MoF doesn't seems to be listening or care, although they have access to vast amounts of data. I am sure there is a market for the inflation report and analysis that goes it.<BR/><BR/>For example, I think, in US, a private economic analysis company declares if US is or has been in a recession and for how long - after the fact, of course.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-33002974856252460132008-06-05T21:45:00.000+05:302008-06-05T21:45:00.000+05:30Yes, measuring inflation better is very important....Yes, measuring inflation better is very important. We should certainly get to it. It is shockingly cheap to measure inflation properly.<BR/><BR/>Whatever is measured today: for better or for worse, it's being used for policy analysis and policy formulation. The question is: Can this downstream process of analysing and responding to inflation be done better? I think the answer is Yes.Ajay Shahhttps://www.blogger.com/profile/03835842741008200034noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-76741467294213964762008-06-05T21:25:00.000+05:302008-06-05T21:25:00.000+05:30But wouldn't the first step (before writing inflat...But wouldn't the first step (before writing inflation reports), be to build a clear and consistent measure of inflation itself? India uses the WPI in contrast to world practices, and has no unified measure of CPI across the nation. <BR/>Moreover, on inflation targeting, determining what to target itself seems to be a question - the WPI, an aggregated form of CPI or core inflation? Critics argue that the central bank must target core inflation as it cannot control noise in headline inflation and may signal the markets wrongly.. I'd be interested to know your thoughts on this.Anonymousnoreply@blogger.com