But in time it became increasingly clear that, for all their theoretical advantages, these sophisticated models did not reliably outperform a number of simple and far less costly reduced-form models, from the money supply models that appeared to work well for a while during the 1970s, to astructural vector autoregression models based on a handful of lagged variables that are still employed today.
Valuation of banks’ investment portfolio The banks have a large portfolio of Government Securities and the method of their valuation is of special interest not only to RBI and bankers, but also to PDs who deal significantly in the market. Currently, banks have been asked to bifurcate their investments into Permanent and Current categories.