Research
Rigorous, data-driven policy research informing India’s economic decisions.
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ICPP's accessible policy outputs translating research into practical, evidence-based decisions.

Agriculture
Agriculture sustains the livelihoods of a majority of Indians, yet the sector remains constrained by policy fragmentation, subsidy distortions, and weak market linkages. This vertical examines the structural transformation of India's rural economy — how farm incomes can be raised, how supply chains can be made more efficient, and how public investment and institutional design shape agricultural outcomes across states. Research spans value chains, agricultural markets, diet and nutrition policy, and the digitalisation of farming. The vertical engages closely with central and state governments to translate findings into actionable reform.
Employment
India's labour market presents one of its most complex policy challenges — a large and growing workforce, persistent informality, gender gaps in participation, and rapid technological change. This vertical examines the conditions under which India can generate productive, formal employment at scale. Research spans labour law reform, skilling and vocational training, the future of gig work, and the impact of AI on jobs across sectors and states. The vertical connects empirical research on employment outcomes with the policy levers available to central and state governments
Financial Markets & Policy
Well-functioning financial markets are essential to mobilising capital, managing risk, and sustaining economic growth. This vertical examines the policy and regulatory dimensions of India's financial system — including capital flows, exchange rate management, investor frameworks, and the growing role of technology in markets. The work is oriented towards strengthening the interface between financial markets and public institutions, and towards identifying regulatory gaps that could pose systemic risks. The vertical serves as a neutral platform for evidence-based dialogue between regulators, market participants, and policymakers
International Trade
India's integration into global trade is both an opportunity and a policy challenge. This vertical examines the conditions under which India can expand its export base, reduce logistics costs, and participate more effectively in global value chains. Research spans trade facilitation, free trade agreement strategy, digital trade, and the domestic regulatory environment at the border. As global trade faces structural shifts — from supply chain realignment to rising protectionism — the vertical aims to equip Indian policymakers with evidence-based frameworks for navigating an increasingly complex trade landscape.
Macro & Public Finance
Sound macroeconomic policy is the bedrock of sustained growth. This vertical examines India's fiscal architecture, public debt dynamics, monetary policy, and the statistical systems that underpin economic decision-making. The work spans both foundational questions — how India manages its public finances over the long term — and immediate policy challenges around inflation measurement, sovereign creditworthiness, and growth forecasting. By bridging academic rigour with direct government engagement, the vertical aims to strengthen the analytical foundations of India's macroeconomic policymaking.
Regulation
Regulation shapes the environment in which markets, firms, and citizens operate — yet in India, regulatory design remains inconsistent and often counterproductive. This vertical examines how regulation is conceived, implemented, and reformed across sectors. The work focuses on the institutional architecture of regulators, the relationship between regulatory quality and economic outcomes, and the conditions under which regulation enables rather than stifles growth. ICPP convenes researchers, legal scholars, and practitioners to build a stronger evidence base for regulatory reform in India.

Research Working Paper

Inflation and Labor Markets: A Bottom-Up View

Macro & Public Finance

11 October, 2024

Inflation and Labor Markets: A Bottom-Up View

Dr. Prachi Mishra

Dr. Prachi Mishra

Head and Director, ICPP Co-lead Financial Sector Regulations and Public Finance

Do Lee

New York University (NYU) - New York University

Sopia Chen

International Monetary Fund (IMF) - Research Department

Deniz Igan

Bank for International Settlements (BIS)

U.S. inflation surged in 2021-22 and has since declined, driven largely by a sharp drop in goods inflation, though services inflation remains elevated. This paper zooms into services inflation, using proprietary microdata on wages to examine its relation-ship with service sector wage growth at the Metropolitan Statistical Area (MSA) level. We estimate the wage-price pass-through with a local projection instrumental variable model that exploits variation in labor market tightness across MSAs. Our findings re-veal a positive and significant relationship between wages and price growth, with a lag. This suggests that the effects of tight labor markets are persistent and may influence the pace of progression toward the inflation target.

As the policy wing of Ashoka University, ICPP stands at the intersection of rigour and relevance, building pathways for knowledge to converge, travel, inform, and transform.

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Designed with 🤍 by Sane Difference