| The question for India would be whether in the current global non-system, inflation targeting is the best choice. As the tenure of Reserve Bank of India (RBI) governor Raghuram Rajan draws to a close, appreciations and encomia have been pouring in. An editorial in this newspaper argued that, if one had to sift all of Rajan’s accomplishments, the adoption of inflation targeting as India’s new monetary policy paradigm “is undoubtedly Rajan’s most defining contribution to policymaking as governor”.
This is most certainly true—whether one applauds the move or is critical of it, it represents an important structural shift in one of the two pillars of conventional macroeconomic policy (the other, of course, being fiscal policy)...............................................Full Article: Source
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