Acta Scientific Agriculture (ASAG)(ISSN: 2581-365X)

Review Article Volume 4 Issue 2

Macroeconomic Implications of the Monetary Policy Committee Recommendations: An IS-LM Framework

Khyati Kathuria1 1 and Pawan Whig2*

1Assistant Professor, VIPS, GGSIPU, India
2Dean Research, VIPS, GGSIPU, India

*Corresponding Author: Pawan Whig, Dean Research, VIPS, GGSIPU, India.

Received: December 04, 2019; Published: January 28, 2020

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Abstract

  The paper aims to analyze the possible implications of the decisions taken by the Reserve Bank of India (RBI) in its monetary policy committee (MPC) meeting in the year 2019 for the Indian economy. The MPC is a committee of the Central Bank in India (RBI), headed by its Governor, which is entrusted with the task of fixing the benchmark policy interest rate (repo rate) to contain inflation within the specified target level. Throughout the year the MPC has reduced the policy repo rate and changed its stance from neutral to accommodative. The macroeconomic impact of such decisions has been analyzed in an IS-LM framework. The impact of the corporate tax cut done by the Finance Minister has also been analyzed using the IS-LM and AD-AS approach.

Keywords: Inflation; India; Interest Rate; IS-LM; MPC; RBI; Repo Rate

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References

  1. Snyder CM., et al. “Microeconomic theory: Basic principles and extensions”. South-Western Cengage Learning (2012): 488-489.
  2. “Reserve Bank of India”. Reserve Bank of India, www.rbi.org.in/.
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  4. Samuelson PA and Scott A. Economics: an introductory analysis. New York: McGraw-Hill 715 (1967).
  5. Branson WH. Macroeconomic determinants of real exchange rates (1981).
  6. Dornbusch R and Edwards S. The macroeconomics of populism. In The macroeconomics of populism in Latin America. University of Chicago Press (1991): 7-13.
  7. Froyen RT and Perez SJ. Macroeconomics: Theories and policies (No. 339 F7 2005). Macmillan (1990).
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Citation

Citation: Khyati Kathuria and Pawan Whig. “Macroeconomic Implications of the Monetary Policy Committee Recommendations: An IS-LM Framework" . Acta Scientific Agriculture 4.2 (2020): 121-126.



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