INFLAI ION 69 tions and estimation model. One major shortcoming of these models is the relative insignificance they attach to the supply constraints. Tho^e who tried to improve upon this shortcoming, by incorporating the supply variables, have not succeeded much in integrating them with the rest of the model. In a predominantly agricultural country like India, the role of the rural sector in the process of generation of prices is not a trivial thing. The need for a closer look into this rote still remains. Similarly, the food-grain prices, which set in motion the pace for all other price movements, have been approached from the point of view of a market clearing mechanism, rejecting the part played by speculative stock holding m the price formation. It is from this background that Isher Judge Ahluwalia proclaims that the purpose of the book under review, originally a doctoral thesis submitted to the prestigious Massachusetts Institute of Technology, is "an ccclectic approach in analysing the behaviour of prices and outputs in the Indian economy, combining elements of structural, demand-pull, cost-push and monetary theories of inflation." While going through this small five-chapter work (along with five appendixes) one finds that Ahluwalia "is not a prisoner of any particular theory of inflation", as Jagdish N Bhagwati has noted in the foreword. Ahlwalia's attempt is to disaggregate the structural characteristics of the Indian economy in the light of the prevailing institutional characteristics and then to establish inter-sectoral linkages through macro-econometric specifications. The work contains all the formal requirements that a good econometric research should have—sequence-wise, thorough examination of data, review of existing literature on the subject, formulation of hypothesis through model specifications, estimation of the basic models, simulation preceding interpretation of results and conclusion. One hundred and twentyone variables are picked up and 67 equations fitted to time series data for the period 1950-51 to 1972-73 spread over agricultural, manufacturing, foreign, fiscal and monetary sectors. Almost^all equations yield "better" results as indicated by the R^ values obtained from least square estimates. However, belter regression results arc not all. How far they are capable of explaining the behaviour of prices and outputs in India during the period of investigation is more important. Let us take a sample of estimates and see the way they capture the problem. It is a well-known fact that the post-1965 period in India,