Monetary Transmission and Inflation Persistence in India
Abstract
This paper estimates the speed of monetary transmission to CPI inflation in India using a structural VAR on 2004–2025 data.
We document incomplete but faster transmission after the flexible inflation targeting framework. Food shocks still dominate short-run CPI variance.
Methodology
Structural VAR with sign restrictions; monthly data.
Conclusion
Policy should look through volatile food shocks while anchoring medium-term expectations.
How to cite
Rohan Mehta, Meera Nair (2026). Monetary Transmission and Inflation Persistence in India. Indian Economy Review. https://indianeconomy.com/research/monetary-transmission-inflation-persistence-india https://doi.org/10.1234/ier.2026.12.2.1
Author profile: Rohan Mehta
