When it comes to measuring inflation persistence, a common practice in empirical research is to estimate univariate autoregressive moving average (ARMA) time series models and measure persistence as the sum of the estimated AR... more
When it comes to measuring inflation persistence, a common practice in empirical research is to estimate univariate autoregressive moving average (ARMA) time series models and measure persistence as the sum of the estimated AR coefficients. We examine four potential sources of lag dynamics in inflation: the evolution of policymakers willingness to stabilize output, shifts in the mean inflation rate, imperfect credibility and learning and unemployment persistence. We show that the reduced-form solution for inflation in all these models have an ARMA(p,q) representation. By implication estimating a reduced-form for inflation will not be able to distinguish among these alternative hypotheses. We illustrate this using US and UK data.
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From 2003, the Indian economy enjoyed a boom in growth coupled with moderate inflation for five years. The economy grew at a rate close to 9 percent per year, until it was punctured by the global financial crisis of 2008. Since then, the... more
From 2003, the Indian economy enjoyed a boom in growth coupled with moderate inflation for five years. The economy grew at a rate close to 9 percent per year, until it was punctured by the global financial crisis of 2008. Since then, the persistence of inflation in an environment of falling economic growth has come out as a “puzzle” to policymakers’ and many in the financial market. Why has the current slowdown in growth not been disinflationary? This paper contends that there were two important policy errors that are behind the stagflationary outcome. The rapid deterioration in public finances in response to the global economic crisis while stimulating demand temporarily managed to pull down the potential growth rate of the economy. The RBI compounded the problem by being sluggish and soft on inflation after the economy bounced back from the effects of the global economic crisis because it systematically overestimated the potential growth rate of the economy. This meant that by the...
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The build up of international reserves by many Asian countries over the last decade or so has attracted widespread interest and debate. This paper seeks to make a contribution to this discussion from the point of view of India. The... more
The build up of international reserves by many Asian countries over the last decade or so has attracted widespread interest and debate. This paper seeks to make a contribution to this discussion from the point of view of India. The empirical results are designed to identify the extent to which the accumulation of reserves in India has been driven by two motives which are commonly identified with respect to the recent accumulation of reserves by the Asian EMEs, namely a demand to have insurance against external shocks and a demand to have a high level of export competitiveness, so as to have export-led growth. Our results provide evidence in support of both the motives in explaining India’s international reserves accumulation strategy, although, their relative importance does seem to vary overtime depending on external factors. This in turn offers some helpful insights into the causes and likely future path of the global imbalances.
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This paper examines the concept of monetary policy credibility from both the theoretical and practical viewpoints. It also discusses the advantages of high credibility and explains measures that can be taken to enhance it. The article... more
This paper examines the concept of monetary policy credibility from both the theoretical and practical viewpoints. It also discusses the advantages of high credibility and explains measures that can be taken to enhance it. The article reviews a number of studies that have examined the credibility of monetary policy making over the past decade. Our main conclusion is that credibility is an elusive thing. The only way to be sure of acquiring it is to earn it by deeds. The existing theoretical literature would benefit a great deal by taking this into consideration.
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Despite widespread recognition that credibility is an important determinant of inflation persistence, surprisingly little empirical evidence exists to support this hypothesis. We investigate this hypothesis using data for US and UK. Our... more
Despite widespread recognition that credibility is an important determinant of inflation persistence, surprisingly little empirical evidence exists to support this hypothesis. We investigate this hypothesis using data for US and UK. Our results suggest that the degree of inflation persistence is strongly influenced by regime credibility.
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Our objective in this paper has been to provide more theoretically coherent microfoundations for monetary policy rules in response to Lucas’s (1976) critique of econometric policy evaluation and, more importantly, to show that the Taylor... more
Our objective in this paper has been to provide more theoretically coherent microfoundations for monetary policy rules in response to Lucas’s (1976) critique of econometric policy evaluation and, more importantly, to show that the Taylor rule can be derived via Friedman’s k% money supply rule. A key di¤erence with respect to the traditional IS-LM framework, is that, the aggregate decision rules evolve explicitly from optimisation by households and ...rms. We conduct counterfactual historical analysis to compare and contrast Friedman’s rule alongside Taylor’s (1993) rule. JEL classi...cations : D5, D58, E0, E5
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... Keywords: Supply shock; inflation; Phillips curve; monetary policy Corresponding Author:Indira Gandhi Institute of Development Research, Gen. ... proxy for core inflation is the percentage change in WPI for manufactured products... more
... Keywords: Supply shock; inflation; Phillips curve; monetary policy Corresponding Author:Indira Gandhi Institute of Development Research, Gen. ... proxy for core inflation is the percentage change in WPI for manufactured products (see Acharya, 2001). ...
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Forward-looking rational expectation (RE) models such as the popular New Keynesian (NK) model do not provide a unique prediction about how the model economy behaves. We need some mechanism that ensures determinacy. McCallum (2012) says it... more
Forward-looking rational expectation (RE) models such as the popular New Keynesian (NK) model do not provide a unique prediction about how the model economy behaves. We need some mechanism that ensures determinacy. McCallum (2012) says it is not needed because models are learnable only with the determinate solution and so the NK model, once learnt in this way, will be determinate. We agree the only learnable solution that has agents converge on the true NK model is the bubble-free one. But once they have converged, they must then understand the model and its full solution therefore including the bubble. Hence, the learnability criterion still fails to pick a unique RE solution in NK models. JEL Classifications: C62, D84
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Two contrasting views have dominated the research on unemployment during the interwar years. The conventional Keynesian view attributes the persistence of high unemployment in the UK and the US during the interwar period to sluggish... more
Two contrasting views have dominated the research on unemployment during the interwar years. The conventional Keynesian view attributes the persistence of high unemployment in the UK and the US during the interwar period to sluggish adjustment of nominal wages to demand shocks. In contrast, equilibrium models of unemployment suggest that the natural rate is itself endogenous, determined by technological, institutional as well as demographic factors and is therefore not necessarily constant over time. According to this view, unemployment may remain elevated because some (or all) of the driving forces are persistent. How do we discriminate between these competing explanations? To this end, we estimate a time-varying parameter (TVP) model of the unemployment rate for the UK and the US. The Kalman filter estimates of the natural rate of unemployment suggest that most macroeconomic activity during the interwar period reflects persistent movements in steady state, not from steady state. W...
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The Opportunistic Approach to disinflation is an influential model of optimal monetary policy. This strategy for disinflation suggests that in a low inflation environment policymakers' would give higher weight to inflation... more
The Opportunistic Approach to disinflation is an influential model of optimal monetary policy. This strategy for disinflation suggests that in a low inflation environment policymakers' would give higher weight to inflation stabilization when inflation is strengthening, but higher weight to stabilizing output when the economy is already producing lower inflation via favourable supply shocks. A time-varying parameter (TVP) model is estimated to evaluate its empirical likelihood using US data. Preliminary results support this model during the Greenspan regime.
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Research Interests: Economics, Econometrics, Indian Economic problems, Applied Economics, Monetary Reform, and 10 moreMonetary Policy, Transparency, Social Science Research Network, Business and Management, Inflation expectations, European Central Bank, Inflation Targeting, Price Stability, Central Bank, and Inflation Cosmology
In this paper we estimate the Reserve Bank of India's (RBI) policy response to supply shocks. In particular, we exploit an important strand of the recent literature (the new inflation bias hypothesis) to... more
In this paper we estimate the Reserve Bank of India's (RBI) policy response to supply shocks. In particular, we exploit an important strand of the recent literature (the new inflation bias hypothesis) to understand why the two frequently cited measures of inflation in India have persistently diverged in recent years. Specifically, it is argued that the difference in coverage and
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Research Interests: Economics, Monetary Economics, Applied Economics, Monetary Policy, Asymmetry, and 9 moreGMM Analysis, Exchange Rates, Foreign exchange reserve, Guidance and Counseling Intervention Programs, International Reserves, Reserve Bank of India, Tolerance Band, Finance and Investment Banking Area, and Finance and Investment Banking
PurposeIn the past two decades, there has been a remarkable decline in inflation in both developed and developing countries, in sharp contrast to the period immediately preceding it. Interestingly, the behaviour of inflation in India... more
PurposeIn the past two decades, there has been a remarkable decline in inflation in both developed and developing countries, in sharp contrast to the period immediately preceding it. Interestingly, the behaviour of inflation in India broadly exhibits such a pattern. For much of the 1970s and 1980s, India experienced recurrent bouts of high inflation together with sub‐par economic performance. Since the 1990s the inflation record has been far better. The purpose of this paper is to answer an important question about what ultimately brought on this improved economic outcome.Design/methodology/approachA time‐varying parameter model for inflation is proposed which nests all the plausible explanations. The time variation in parameters is modelled as driftless random walks, and is estimated using the median unbiased estimator. The median unbiased estimate helps in addressing the pile‐up problem, which arise if variances of the state specification are small. In such cases the maximum likel...
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... Author info | Abstract | Publisher info | Download info | Related research | Statistics. Author Info.Naveen Srinivasan Vidya Mahambare M. Ramachandran ... Publisher Info. Article provided by Taylor and Francis Journals in its journal... more
... Author info | Abstract | Publisher info | Download info | Related research | Statistics. Author Info.Naveen Srinivasan Vidya Mahambare M. Ramachandran ... Publisher Info. Article provided by Taylor and Francis Journals in its journal Applied Economics Letters. ...
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The expectations trap hypothesis is an influential but untested model of monetary policy. The hypothesis conjectures that high inflation during the 1970s was the outcome of a shift in private sector beliefs which were then validated by... more
The expectations trap hypothesis is an influential but untested model of monetary policy. The hypothesis conjectures that high inflation during the 1970s was the outcome of a shift in private sector beliefs which were then validated by monetary policy. The subsequent fall in inflation was mainly due to changes in those beliefs. We provide a formal test of the model, using US data from 1948-2008. The flexible least squares approach of Kalaba and Tesfatsion (1988, 1989) is used to evaluate its empirical likelihood. Strong formal support is found for this proposition. Specifically, our results suggest that supply shocks interacting with private sector beliefs about the nature of monetary regime together account for the rise and fall of U.S. inflation.
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One approach to achieving price stability is to undertake a deliberate path to an ultimate goal of low inflation - deliberate disinflation. In contrast an opportunistic strategy for disinflation has gained credence in recent years. We... more
One approach to achieving price stability is to undertake a deliberate path to an ultimate goal of low inflation - deliberate disinflation. In contrast an opportunistic strategy for disinflation has gained credence in recent years. We compare the ability of the two approaches to achieve macroeconomic stability and conclude that the opportunistic approach is sub-optimal when a commitment mechanism is in place. We show that an opportunistic inflation response is, however, optimal when there is a non-linearity of the Phillips curve trade-off along with adaptive expectations- circumstances that appear unlikely in conditions of low inflation.
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This paper examines how the Bank of England conducts monetary policy in practice and assesses its policy preferences. Our empirical results using monthly ex post inflation forecast suggest that pursued policy can be characterized by a... more
This paper examines how the Bank of England conducts monetary policy in practice and assesses its policy preferences. Our empirical results using monthly ex post inflation forecast suggest that pursued policy can be characterized by a nonlinear policy reaction function with a deflation bias. We also find evidence of a target range as opposed to a point target for the 1992--5 period. These results are however, not robust to the use of the Bank's own forecast which suggests that pursued policy is consistent with a symmetric point target for inflation. In practice however, inflation has been consistently below the Bank's inflation target in recent years. We argue that a plausible explanation for this is that the MPC had systematically over predicted inflation, which in turn may have resulted in overly restrictive policy. Copyright 2006, Oxford University Press.
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This report examines the process of economic and financial integration in East Asia in the light of Europe's experience.� The report provides a comprehensive analysis of East Asian monetary and financial integration process (including... more
This report examines the process of economic and financial integration in East Asia in the light of Europe's experience.� The report provides a comprehensive analysis of East Asian monetary and financial integration process (including a deep analysis of East Asia's response to the 1997-98 financial crisis), a comprehensive critical survey of the literature on monetary and financial integration in East Asia, and an assessment of the various initiatives undertaken in the region for financial cooperation and macroeconomic surveillance.� Its aim is to evaluate the evolution of the last decade and to offer policy suggestions.� The main policy recommendations concern essentially two areas: (i) how to promote the creation of a regional financial market in Asia and (ii) how to encourage cooperation and macroeconomic surveillance in the region. (Provisional version. The printed publication will be delayed until the final text is available).
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Protein Kinase-Like Non-kinases (PKLNKs), which are closely related to protein kinases, lack the crucial catalytic aspartate in the catalytic loop, and hence cannot function as protein kinase, have been analysed. Using various sensitive... more
Protein Kinase-Like Non-kinases (PKLNKs), which are closely related to protein kinases, lack the crucial catalytic aspartate in the catalytic loop, and hence cannot function as protein kinase, have been analysed. Using various sensitive sequence analysis methods, we have recognized 82 PKLNKs from four higher eukaryotic organisms, namely, Homo sapiens, Mus musculus, Rattus norvegicus, and Drosophila melanogaster. On the basis of their domain combination and function, PKLNKs have been classified mainly into four categories: (1) Ligand binding PKLNKs, (2) PKLNKs with extracellular protein-protein interaction domain, (3) PKLNKs involved in dimerization, and (4) PKLNKs with cytoplasmic protein-protein interaction module. While members of the first two classes of PKLNKs have transmembrane domain tethered to the PKLNK domain, members of the other two classes of PKLNKs are cytoplasmic in nature. The current classification scheme hopes to provide a convenient framework to classify the PKLNKs...
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Inflation rates in a number of developed countries follow a common trend over the past five decades: inflation starts out low in the 1950s, rises for a time before peaking in the 1970s, and then falls back to initial levels. Interestingly... more
Inflation rates in a number of developed countries follow a common trend over the past five decades: inflation starts out low in the 1950s, rises for a time before peaking in the 1970s, and then falls back to initial levels. Interestingly the behaviour of trend inflation in India broadly ...
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The relation between DAML-S, a language for the description of Web services grounded in the Semantic Web, and the growing Web services infrastructure based on WSDL is, by an large, still an open question. In this paper we describe a... more
The relation between DAML-S, a language for the description of Web services grounded in the Semantic Web, and the growing Web services infrastructure based on WSDL is, by an large, still an open question. In this paper we describe a mapping from WSDL to DAML-S whose contribution is twofold: on the theoretical side it clearly shows what information is contributed
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Mechanisms for Web services Discovery proposed so far have assumed a centralized registry that collects information about all the Web services available at any given time. Centralized registries are performance bottlenecks and may result... more
Mechanisms for Web services Discovery proposed so far have assumed a centralized registry that collects information about all the Web services available at any given time. Centralized registries are performance bottlenecks and may result in single points of failure. In this paper, we propose an alternative architecture based on a P2P connection between Web services and we show how to
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This paper introduces a completely new approach to encryption based on group theoretic quantum framework. Quantum cryptography has essentially focused only on key distribution and proceeded with classical encryption algorithm with the... more
This paper introduces a completely new approach to encryption based on group theoretic quantum framework. Quantum cryptography has essentially focused only on key distribution and proceeded with classical encryption algorithm with the generated key. Here, we present a first step towards a quantum encryption scheme based on the solution for the hidden subgroup problem. The shared secret key K from
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Abstract: The increasing cyber threat with the expansion of web applications demands a constant need for safeguarding our own network resources from vulnerability exploits. Attacks can occur at the network and application level. The... more
Abstract: The increasing cyber threat with the expansion of web applications demands a constant need for safeguarding our own network resources from vulnerability exploits. Attacks can occur at the network and application level. The existent solutions like firewalls perform wellat ...
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Abstract The current security problems in the internet quantify the need for a semantic intrusion detection system engine working in the application level. In the proposed semantic IDS, an object is defined as an occurrence of an... more
Abstract The current security problems in the internet quantify the need for a semantic intrusion detection system engine working in the application level. In the proposed semantic IDS, an object is defined as an occurrence of an elementary pattern represented by a ...
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... Fuzzy Rule-Base Based Intrusion Detection System on Application Layer S. Sangeetha, S. Haripriya, SG Mohana Priya, Dr.V. Vaidehi, and Dr.N. Srinivasan Department of CSE, Angel College of Engineering and Technology, Tirupur... more
... Fuzzy Rule-Base Based Intrusion Detection System on Application Layer S. Sangeetha, S. Haripriya, SG Mohana Priya, Dr.V. Vaidehi, and Dr.N. Srinivasan Department of CSE, Angel College of Engineering and Technology, Tirupur visual.sangi@gmail.com Abstract. ...
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Page 1. IEEE - ICSCN 2007, MIT Campus, Anna University, Chennai, India. Feb. 22-24, 2007. pp.355-359. Application Level IDS using Protocol Analysis KV Rajkumarl, V. Vaidehil, S. Pradeepl, N. Srinivasan' and M. Vanishreel ...
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ABSTRACT Network intrusion detection systems (NIDSs) is one of the primary components in any network security infrastructure. Currently, many NIDSs that are developed are rule-based systems and their performances mainly depend on the rule... more
ABSTRACT Network intrusion detection systems (NIDSs) is one of the primary components in any network security infrastructure. Currently, many NIDSs that are developed are rule-based systems and their performances mainly depend on the rule sets. But rules formation becomes a tedious and rime consuming task due to the enormous amount of network traffic. This is overcome by using data mining techniques. These techniques build intrusion detection models adaptively. Random forests is an efficient data mining algorithm which can be used for network intrusion detection This can be used for real time intrusion detection. In this paper, we discuss the approaches for feature selection, and optimization of parameters of random forests, compare different models, and also discuss the other method for detecting the anomalies across active networks.
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This paper suggests an improvement to the BB84 scheme in Quantum key distribution. The original scheme has its weakness in letting quantifiably more information gain to an eavesdropper during public announcement of unencrypted bases... more
This paper suggests an improvement to the BB84 scheme in Quantum key distribution. The original scheme has its weakness in letting quantifiably more information gain to an eavesdropper during public announcement of unencrypted bases lists. The security of the secret key comes at the expense of the final key length. We aim at exploiting the randomness of preparation (measurement) basis
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The increasing availability of web services demands for a discovery mechanism to find services that satisfy our requirement. UDDI provides a web wide registry of web services, but its lack of an explicit capability representation and its... more
The increasing availability of web services demands for a discovery mechanism to find services that satisfy our requirement. UDDI provides a web wide registry of web services, but its lack of an explicit capability representation and its syntax based search provided produces results that are coarse in nature. We propose to base the discovery mechanism on OWL-S. OWL-S allows us
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In a variety of recent papers, researchers have found that interest rate behaviour approximately follows a Taylor rule. We show that such interest rate behaviour results when the central bank may be following quite different monetary... more
In a variety of recent papers, researchers have found that interest rate behaviour approximately follows a Taylor rule. We show that such interest rate behaviour results when the central bank may be following quite different monetary policy rules from the one ...