ESSAYS ON INDIAN BUSINESS CYCLES AND INFLATION

This book presents new findings on Indian business cycles and inflation. The research is divided up into three essays. The first essay finds that U.S. business cycles have been transmitted to the Indian economy, not only since India's liberalization of the early 1990s, but since the early 1960s. Channels of this transmission do not appear to have been through trade, but through monetary policy instead. The second essay finds that the domestic and global supply shocks are the main reasons for the apparent absence of the Phillips curve for India. Once these shocks are adequately taken care of, the Phillips curve for India emerges in the conventional fashion. Contrary to conventional belief, the third essay finds that India's liberalization of 1991 did not cause any structural break in India's industrial growth. The policy shocks of liberalization actually began in the early 1980s and continued until the mid 1990s causing two breakpoints in 1983 and 1996 in the volatility of India's industrial growth. These interesting results will usher in further research on Indian business cycles and inflation.