The Reserve Bank of India on December 16, 2021 has published a Working Paper titled “An Alternative Perspective on Demand and Supply to Forecast Inflation”. The paper develops a new method to construct a measure of demand-supply imbalance in the economy using a Bayesian Dynamic Factor Model. The estimated index of demand-supply mismatch is found to have a causal relationship with headline inflation. It is also found to be a competing predictor of headline inflation, as compared to other conventional measures of slack such as the output gap and level of capacity utilisation.
Consultation paper on Maintenance of Record of Mandatory Communication by Regulated Entities
It is proposed that the regulated entities maybe mandated to maintain the record of all such communication, which are mandated to be communicated under the