In this seminar Dony Alex will provide an overview of his recent paper, ‘Evolving Macroeconomic Dynamics of the Indian Economy’. This paper examines how the transmission of the structural shocks has evolved for India over the post reform period from 1991 to 2014. Dony uses a Bayesian time varying parameters structural vector autoregression with stochastic volatility, with identification of the structural shocks done with sign restrictions. The author finds that supply and monetary policy shocks have larger impact post 2004 after the major banking and financial reform were undertaken in India. To understand the behaviour of the volatility of inflation and output variable, Dony has also used a univariate stochastic volatility model for a larger sample from 1973 onwards. He detects sharp reductions in volatility in the post reform period for both inflation and industrial output. Interestingly, he also finds that during the East Asian crisis, the volatility surge is much higher than observed during the recent global financial crisis.

Dony Alex is a PhD student at CAMA. His research interests are in applied macroeconomics and monetary economics.

The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.