I am happy to acknowledge the participation in today’s conference of several renowned statisticians: Prof. Bimal Roy, Director, Indian Statistical Institute; Prof. Richard Smith, University of Cambridge; Prof. B.L.S. Prakasa Rao, C R Rao Institute, Hyderabad and Prof. Subhashis Ghoshal, North Carolina State University. It is my pleasure to extend a warm welcome to each one of you. 3.
If the economy is producing at potential, we would quickly see shortages and a sharp rise in inflation. People will also start expecting the central bank to disregard inflation (that is, be hopelessly dovish according to the bird analogies that abound) and embed high inflationary expectations into their decisions, including their demand for higher wages.