Study of Relationship between Monetary Policy and Inflation

This study examines how monetary policy has changed over time in
relation to inflation in India between 2014 and 2023.The monetary
authorities are working hard to reduce inflation by implementing
a number of monetary policy tools, the most significant of which
are adjustments to the CRR, repo, and reverse repo rates. This paper
presents an econometric analysis of how changes in the monetary
authorities’ CRR, repo rate, and reverse repo rate affect their ability to
control inflation. With the goal of offering a thorough grasp of their
dynamic interaction, this study explores the complex link between
inflation and monetary policy. This research takes a multimodal
approach to investigate the complex mechanisms by which
monetary policy shapes inflationary tendencies, with an emphasis
on theoretical frameworks as well as actual data. In addition to
taking into account the larger economic backdrop, the research
covers a variety of monetary policy tools, such as interest rates, the
money supply, and unorthodox measures. In order to represent
a variety of macroeconomic environments, the research uses
sophisticated econometric approaches to evaluate historical data,
encompassing both developed and emerging economies. The study
aims to provide nuanced insights into the transmission mechanisms
and lags involved by analysing the short- and long-term effects of
monetary policy on inflation