The ornithology of macroeconomic policy India new monetary policy framework

The hawks have landed

Hawks, doves and owls – some even speak of seagulls – but what have birds got to do with macroeconomics? At first, such ornithological labels seem an apt way of describing personalities of individuals.  Indeed, to an extent, they are. But there is something more significant in these ornithological tags that may often be overlooked; a discerning categorization of the diverse schools of macroeconomic thought that individuals in key positions subscribe to, with far reaching consequences.

In the Indian context, Governors of the Reserve Bank of India (RBI) have often been subject to ornithological labelling for their stand on inflation. Going back to the not-so-distant past,

  1. V. Reddy, in spite of having raised interest rates sharply during the boom prior to the Great Recession of 2008, was never unequivocally labelled an “inflation hawk”; in fact, to describe him as one was considered “unfair”1. His successor D. Subbarao was more definitely “hawkish” although not always categorically considered a “hawk” since there were times when it seemed he had not raised rates sufficiently to tame inflation2 and other times when it seemed he was willing to compromise, albeit just a little3. It was, however, Raghuram Rajan, who earned the title of a true “inflation hawk”. Not only was he able to propound his views on

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