Inflation, Macroeconomic Policy and Hunger: A Variation on a Theme by C Rangarajan

Raghbendra Jha

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


This paper re-emphasizes the importance of price stability as a tool for macroeconomic policy and make it more specific by considering a typically (unanticipated) advantage of stabilizing the Consumer Price Index (CPI). I briefly review the recent economic growth performance of the Indian economy and recount the sluggish response of poverty to high economic growth. Further, hunger (calorie deficiency) has actually increased during the post-reform period. Using household level National Sample Survey (NSS) data for 1993-94 and 2004-05 the paper shows that calorie intakes in both rural and urban areas are sensitive to commodity (in particular food grain) prices. Hence, reducing consumer price inflation is likely to yield a rich dividend by reducing hunger. Indeed rising per capita incomes are not likely to be sufficient to reduce hunger. The paper also reviews some policy challenges to stabilizing consumer prices.
Original languageEnglish
Title of host publicationGrowth and Finance: Essays in Honour of C. Rangarajan
EditorsSameer Kochhar
Place of PublicationNew Delhi India
PublisherAcademic Foundation
ISBN (Print)9788171888665
Publication statusPublished - 2011


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