Monetary Policy Transmission and Inflation Dynamics in India: An Econometric Analysis using VAR Models: “Supplementary Data, Econometric Results, and Diagnostic Analyses”

“Monetary Policy Transmission and Inflation Dynamics in India: An Econometric Analysis using VAR Models” provides a comprehensive and empirically rigorous examination of how monetary policy affects inflation in India. Using quarterly data spanning 2000 to 2024, this book employs advanced Vector Autoregression (VAR) models to analyse the dynamic relationships among key macroeconomic variables, including the repo rate, money supply, GDP growth, exchange rate fluctuations, and global oil prices. The study offers unique insights into the delayed and partial transmission of monetary policy, the persistence of inflation, and the dominant role of external supply-side shocks in shaping price dynamics.Designed for researchers, policymakers, economists, and students of macroeconomics, this book bridges theoretical frameworks and practical policy implications. It provides in-depth discussions on the interest rate channel, credit channel, expectations channel, and the interaction of fiscal and monetary policy in controlling inflation. Key features include: detailed empirical results, impulse response functions, forecast error variance decomposition, and diagnostic analyses to ensure robust econometric modelling.Readers will gain a nuanced understanding of India’s inflation targeting framework, challenges in monetary policy transmission, and strategies for strengthening financial markets, improving interest rate pass-through, and managing supply-side shocks. By incorporating both domestic and global determinants of inflation, this study demonstrates the complexities faced by central banks in emerging economies.The book also includes a comprehensive appendix with variable definitions, stationarity tests, lag selection criteria, stability diagnostics, and VAR model outputs, making it a valuable resource for academic coursework, policy research, and professional reference. It contributes significantly to the literature on monetary economics, offering evidence-based guidance for effective macroeconomic management in India and other emerging market economies.Whether you are a graduate student preparing for research in monetary policy, an economist analysing emerging market inflation dynamics, or a policymaker seeking data-driven insights, this book provides a complete toolkit for understanding, modelling, and interpreting monetary policy effects in the Indian context. It is also highly suitable for exam preparation for GATE Economics, UPSC, UGC NET/JRF, and other competitive examinations requiring a strong foundation in applied econometrics and macroeconomic policy analysis.