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This paper estimates core inflation for India and Pakistan using a structural VAR approach, analyzing the impact of supply and demand shocks on output and inflation. It defines core inflation as the persistent component of inflation that does not affect output in the medium to long run, and concludes that forward-looking core inflation estimations can aid monetary policy. The study highlights the significance of supply shocks in these developing economies and the central banks

Author

oumayma.bouchebchoub

Language

EN