Supply Shocks to Weaken Monetary Policy Effectiveness: CEA

Supply shocks to weaken monetary policy effectiveness: CEA

Chief Economic Advisor V Anantha Nageswaran emphasized the diminishing effectiveness of interest rate adjustments in controlling inflation due to supply chain disruptions. He indicated that fiscal policies will play a critical role in addressing these supply-induced challenges. Nageswaran highlighted that many countries have struggled to meet their inflation targets since 2022. He underscored the potential long-term dominance of supply shocks in…

Supply-driven inflation: Why interest rate hikes may become less effective

Chief Economic Advisor V Anantha Nageswaran says supply shocks may weaken interest rate tools, calling for fiscal measures and a renewed focus on agriculture.

Traditional monetary policy losing effectiveness amid prolonged supply shocks: CEA Nageswaran

Digital Desk | New Delhi, Nov 13 (IANS) Chief Economic Advisor V Anantha Nageswaran stated on Friday that traditional monetary policy instruments, such as modifying interest rates, might lose their effectiveness in addressing inflation in a world that is increasingly susceptible to supply-side disruptions. He noted that fiscal and other public policy strategies will become more crucial, as simply increasing interest rates will not resolve prob…