6  Deepak Mohanty, A B Chakraborty, Abhiman Das and Joice John, “Inflation Threshold in India: An Empirical Investigation” W P S (DEPR): 18 / 2011. 8  BIS central bankers’ speeches  (vi)  New normal on account of PPP convergence is not inevitable  50.
Apart from all the empirical arguments, there is also an important conceptual argument against the “new normal” hypothesis. As India’s integration with the world picks up pace over the next decade, it is important also that our inflation rate is in line with global inflation.