RBI Chair

In accordance with the provisions of Section 17(15B) and (16) of the Reserve Bank of India Act, 1934, the Reserve Bank has been operating the Corpus Fund Scheme in universities and research institutions for promotion of economic research, training in banking, real sector issues, monetary and financial economics. The Reserve Bank established a Professorial Chair (called “RBI Chair”) under the Scheme at MIDS in 1986. Since then, the RBI Chair professorship at MIDS has been held by Prof. A. Vaidyanathan (1986-1990), Prof. Nasir Tyabji (1990-1994), Prof. Padmini Swaminathan (1994-2011), Prof. D. Jayaraj (2011-2018). At present, Prof. L. Venkatachalam holds the RBI Chair Professor position at MIDS from 2018 onwards. There are two supporting staff who assist the RBI Chair Professor in carrying out research and dissemination activities.

The RBI Chair Professor is responsible and accountable for the functioning of the RBI Chair at the institute in accordance with the academic requirements as may be specified by the Reserve Bank. The RBI Chair Professor provides input on sector-specific topics as suggested by the Reserve Bank from time to time.

In addition to research, we organise short training courses and capacity-building programmes on macroeconomics, monetary economics, development economics, public policy, project evaluation, climate change finance, Green GDP, etc. In addition, we help in peer reviewing the papers submitted for the Occasional/Working Paper series by the RBI staff. We also encourage the faculty members from MIDS to take up studies which are of relevance to the RBI.

The RBI has recently enhanced the corpus amount from Rs. 4 crores to Rs. 10 crores which will further be enhanced to Rs. 12 crores in another five years from now. The income and earnings from the corpus fund are utilised for research and teaching activities.

Staff Position:

  • RBI Chair Professor: Prof. L. Venkatachalam
  • Research Staff 1: Dr. L. Muthukrishnan
  • Research Staff 2: Mr. E. Lakshmanakumar

RBI Course

The RBI Chair at MIDS works towards increasing the coverage of macroeconomic and financial sector issues as part of its curriculum, that could help in training the Economics/Management students who are contemplating a professional career (either in the RBI or any other public institution), and also RBI’s staff working in various central banking functions. Following are two such courses:

I. Financial Programming:

This course will help to understand and analyse the major macroeconomic sectors in the economy and their interlinkages. This, in turn, will help in diagnosing the macroeconomic and sectoral imbalances and proposing policy options.

  1. Basic concepts, characteristics and process of Financial Programming
  2. Interrelations among macroeconomic accounts
    1. Overview of four accounts: Real, External, Government, Monetary and Financial sector
    2. Interrelations among these accounts: Accounting and behavioural consistency
    3. Financial links and flow of funds
  3. Real sector and inflation: Analysis and forecasting
    1. Forecasting GDP from supply side
    2. Forecasting inflation
  4. Balance of payments: Analysis and forecasting
    1. Basics of balance of payments accounting: Trade, current, capital, and financial accounts
    2. Trade flows and exchange rate
    3. International investment position
    4. Forecasting balance of payments
    5. Current account sustainability norms and exchange rate misalignment
    6. Assessing a country’s external position: Reserve adequacy and external sustainability
  5. Fiscal sector: Analysis and forecasting
    1. Basics of fiscal accounts
    2. Government sector operations: Revenues, expenses, financing and debt
    3. Fiscal balances and indicators of fiscal position
    4. Forecasting fiscal accounts
    5. Fiscal policy and how to conduct it
  6. Monetary sector: Analysis and forecasting
    1. Overview of monetary aggregates and depository institutions’ balance sheets
    2. Monetary liabilities and money demand functions
    3. Basics of monetary instruments and policy, inflation targeting and central bank liquidity operations
    4. Credit aggregates – Linkages with other sectors
    5. Analysis and forecasting of monetary accounts
  7. Macro-financial linkages
    1. Analytics of macro-financial linkages
    2. Identifying financial soundness and systemic risks
    3. Preserving financial stability using macroprudential policy
    4. Medium-term framework for macroeconomic stability

II. Open-Economy Macroeconomics in Emerging Market Economies (EMEs):

This course will help to understand the impact of global spillovers on the domestic economy, at the aggregate and sectoral levels; range of policy options and trade-offs; and the challenges for the conduct of monetary policy in an open economy framework.

  1. Open Economy Concepts
    1. Treatment of the external sector in national accounts
    2. Balance of Payment – Standardised compilation, theories of adjustment
    3. Foreign exchange market – Bilateral exchange rate, NEER / REER
    4. Exchange rate regimes – Fixed/flexible, covered and uncovered interest rate parity conditions
  2. Frameworks of Monetary Policy
    1. Monetary targeting
    2. Interest rate targeting
    3. Inflation targeting
    4. Indian experience
  3. Operating Procedure of Monetary Policy
    1. Institutional arrangements
    2. Liquidity forecast and liquidity management
    3. Choice of instruments
    4. Communication policy
  4. Monetary Policy Transmission
    1. Channels of monetary policy transmission
    2. Case studies
  5. Co-ordination between Monetary Policy and Fiscal Policy
    1. Fiscal policy and inflation
    2. Central bank independence
    3. Areas of coordination
    4. Impact of coordination failure
  6. Monetary Policy Challenges in an Open Economy
    1. Impossible Trinity
    2. BoP management – Current account/capital account convertibility, drivers of capital flows
    3. Exchange market pressures – volatility, drivers, pass through, intervention/sterilization
    4. Financial stability – First/Second/Third generation models and policy safeguards
  7. Public Policy Options in an Open Economy
    1. Rule-based monetary policy – Taylor Rule
    2. Rule-based fiscal policy – FRBM Act in India
    3. Integrated policy framework for open economies – Range of options
    4. Open economy macro model
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