Book Review: “Inflation: An Economic Phenomenon That Matters” by Madhusudhanan S

New Delhi: Inflation is one of the most discussed and debated topics in economics, affecting everything from daily household expenses to national economic policies. In Inflation: An Economic Phenomenon That Matters, Madhusudhanan S provides a comprehensive analysis of this complex subject.

The book delves into the fundamental aspects of inflation, its impact on the economy, and policy measures to combat it.

With a balanced blend of theory and real-world implications, the book serves as a valuable resource for economists, students, policymakers, and general readers interested in understanding the dynamics of inflation.

Content and structure

The book is structured into two primary sections: the theoretical foundation of inflation and its application in the Indian context.

The first part introduces inflation as a phenomenon, discussing its causes, types, and effects on economic stability. The author effectively explains different types of inflation, such as demand-pull and cost-push inflation, and explores the role of supply shocks, monetary policies, and external economic factors in influencing inflation rates.

Madhusudhanan S also examines the relationship between inflation and other economic variables such as employment, GDP growth, and exchange rates.

The second section shifts focus to India, analyzing inflationary trends in the country over the years.

The author provides a historical overview, highlighting key inflationary episodes and the policies implemented to control them.

A significant portion of the book is dedicated to explaining the Reserve Bank of India’s (RBI) approach to inflation targeting and monetary policy. The discussion on post-pandemic inflation is particularly relevant, offering insights into how the COVID-19 crisis reshaped inflationary patterns globally and in India.

Key strengths

1. Clarity and Accessibility: The book presents complex economic concepts in a simple and comprehensible manner. The author avoids excessive technical jargon, making it an engaging read for non-economists while still being informative for experts.
2. Timeliness and Relevance: Given the recent economic disruptions caused by global supply chain issues, the pandemic, and geopolitical tensions, the book’s discussion on inflation is highly relevant. The author connects historical inflation trends with contemporary challenges, providing a holistic perspective.
3. Policy-Oriented Approach: One of the strongest aspects of the book is its focus on policy measures to combat inflation. The author critically evaluates monetary and fiscal policies, explaining their effectiveness and limitations. The discussion on inflation targeting by the RBI and its impact on India’s economy is particularly insightful.
4. Real-World Examples: The book incorporates real-life examples and case studies, making theoretical concepts more relatable. The analysis of how inflation affects different sectors of the economy, including banking, stock markets, and consumer behaviour, adds depth to the discussion.

Areas for improvement

While the book is well-researched and informative, there are a few areas where it could have been improved:

1. More Empirical Data: Although the book discusses historical trends and theoretical aspects effectively, the inclusion of more statistical data and graphical representations could have strengthened the arguments. Comparative inflation rates across different countries would have provided a broader perspective.
2. Case Studies of Other Economies: While the book primarily focuses on India, a comparative analysis of how different countries have managed inflation could have been beneficial. Drawing parallels with economies such as the US, Japan, or the Eurozone would have enriched the discussion.

Final Verdict

Madhusudhanan S’s Inflation: An Economic Phenomenon That Matters is a well-structured and insightful book that effectively breaks down a complex economic issue into an understandable and engaging narrative.

By combining theoretical analysis with real-world applications, the author provides a holistic view of inflation and its impact on the economy.

The book is particularly useful for students, researchers, and policymakers seeking a thorough understanding of inflation dynamics in India and beyond.

Despite minor limitations, such as the lack of extensive empirical data and global comparisons, the book remains a significant contribution to economic literature.

It successfully bridges the gap between academic analysis and practical policymaking, making it a must-read for anyone interested in the subject.

(The hardcover book, priced at Rs 395, is published by Rupa and Co. and is available on Amazon.in)