The impact of monetary policy on food fuel and core inflation

The widely talked about problem in our country “ Inflation” has been thoroughly analyzed also with various jargons  such as CPI ,WPI, PPI, core inflation and headline inflation by experts. In order to find out the root cause for the rise in prices or fall in the purchasing power of currency or the reasons for people’s constant struggle to fulfill their desires, analysis is still going on at different levels. Are the factors coming from demand side or supply side is a question which is yet to be answered. Will the monetary policy work or the fiscal policy be effective is always a puzzle. This paper aims at looking at the problem with a different perspective taking time series data on inflation in India from January 2013 to April 2015 to learn the causal relationship between various inflation rates and the headline inflation.