The study looked at how India's economy grows and deals with inflation. They found that when there are big increases in supply, it can lead to higher inflation. This means the economy is doing well. In 2007-08, India's economy was at its best with growth over 9%. But in 2010-11, growth wasn't as strong. Inflation was caused by many supply shocks, not just the economy doing well. The study also showed that in 2011, there was too much correction in the economy. If potential output is underestimated by 2%, policy rates can go up by 50 basis points.