Hi,

In the dataset, I have long text statements which I have converted to numeric into using encode. However, I do not know how to use them as these statements are super lengthy. I have never calculated cosine similarity so I do not know how to calculate it for the Resolution and Governor. Moreover, should I convert the similar text data so that I get few numeric values?

I have attached a sample of the dataset using dataex

[CODE]
* Example generated by -dataex-. To install: ssc install dataex
clear
input float date long(nameofmember cleanedtext)
21047 5 61
21047 4 32
21047 2 71
21047 3 90
21047 1 40
21047 6 17
21110 5 58
21110 4 70
21110 2 69
21110 3 39
21110 1 13
21110 6 18
21173 5 57
21173 4 36
21173 2 49
21173 3 77
21173 1 31
21173 6 88
21236 5 56
21236 4 37
21236 2 8
21236 3 81
21236 1 11
21236 6 10
21293 5 68
21293 4 33
21293 2 20
21293 3 52
21293 1 87
21293 6 9
21355 5 54
21355 4 89
21355 2 23
21355 3 73
21355 1 3
21355 6 1
21412 5 55
21412 4 34
21412 2 27
21412 3 76
21412 1 5
21412 6 48
21476 5 59
21476 4 38
21476 2 26
21476 3 6
21476 1 45
21476 6 19
21537 5 60
21537 4 35
21537 2 25
21537 3 44
21537 1 12
21537 6 21
21601 5 62
21601 4 53
21601 2 24
21601 3 46
21601 1 42
21601 6 83
21657 5 67
21657 4 7
21657 2 22
21657 3 78
21657 1 43
21657 6 75
21720 5 65
21720 4 86
21720 2 47
21720 3 80
21720 1 41
21720 6 74
21782 5 66
21782 4 72
21782 2 30
21782 3 82
21782 1 4
21782 6 15
21840 5 64
21840 4 84
21840 2 28
21840 3 79
21840 1 51
21840 6 16
21902 5 63
21902 4 85
21902 2 29
21902 3 50
21902 1 2
21902 6 14
end
format %td date
label values nameofmember _nameofmember
label def _nameofmember 1 "Dr. Dholakia", modify
label def _nameofmember 2 "Dr. Dua", modify
label def _nameofmember 3 "Dr. Ghate", modify
label def _nameofmember 4 "Dr. Patra", modify
label def _nameofmember 5 "Resolution Statement", modify
label def _nameofmember 6 "The Governor", modify
label values cleanedtext _cleanedtext

> ion has continued to be benign. On the whole, 11 inflation in March and April has behaved more or less on the lines of the path projected in the April resolution. Two developments are noteworthy from the standpoint of price stability. First, inflation

> 4.7 percent) is 30 bps higher than that in the April resolution. The baseline inflation path faces several uncertainties, viz., (i) the outlook for oil prices; (ii) continuing volatility in global financial markets; (iii) the risk of the significant r

> count of the staggered impact of HRA revisions by various state governments, though the direct statistical impact of HRA revisions will be looked through. However, a normal monsoon, by keeping food inflation benign, could act as a mitigating factor. 57
> . Domestic growth has strengthened with the Q4:2017-18 print at a seven-quarter high and now appears to be on a sustainable path. Investment activity, in particular, has accelerated. There has also been a pick-up in manufacturing and this is manifested
> in an increase in capacity utilisation. The services sector has been resilient with several high frequency indicators continuing to show robust growth in recent months even as PMI services moved slightly into contraction in May. Bank credit growth has
> continued to improve. The recent increase in oil prices, by impacting disposable incomes, may have some adverse impact on private consumption. On the whole, however, economic activity continues to be resilient with GDP growth for 2018-19 projected at
> 7.4 per cent, same as in the April policy. Inflation risks have increased since the April policy. I, therefore, vote for an increase in the policy repo rate by 25 basis points. In view of prevailing uncertainties, it is apposite to maintain the neutral
> stance so as to respond to the evolving situation in a flexible manner.", modify



> s plausible. The sharp spike in food inflation may continue for the next twothree months driving the headline inflation above the mid-point target and closer to the upper bound of the flexible target range. The forecast of inflation by RBI for the 4 qu
> arters up to Q2 of 2020-21 is based on certain assumptions where considerable uncertainties are involved. I, therefore, take the RBI forecast of the headline inflation of 3.8% for Q2 of 2020-21 with some reservation at this point. Inflationary expectat
> ions that were reasonably anchored till recently can shoot up during this period as evident from the RBI Survey of Households and IIMA Survey of Businesses although the situation may not go out of control. Moreover, there are some green shoots of growt
> h recovery during the third and fourth quarters of the current year perhaps in response to the counter-cyclical measures on the fiscal and monetary policy fronts, but they need to be confirmed with more data. I had argued for a 40 bps rate cut in the l

> this juncture before taking a decisive action on the policy rate front. In the meantime, there is enough slack for the markets to adjust to the rate cuts already made. I, therefore, vote to hold the policy repo rate at 5.15% for now and continue with

> portant to understand how much would be the impact and for how long. The household inflationary expectations as per the latest RBI survey showed a sharp 11 increase by 120 bps and 180 bps for three months and twelve months ahead horizon. Thus, the surv
> eyed households believe that the increased inflation is not a temporary phenomenon but can go on increasing over the whole of the year to come. On the other hand, IIM Ahmedabad Survey of Businesses shows an increase of only 10 bps in their inflationary

> ant. ii) My own research with a co-author published in the Economic and Political Weekly on 3rd March 2018 shows that as per recent inflation dynamics the second round effects of an external shock (like food or fuel prices) on the core inflation are, i

> response to the sharp rise in the food prices, the consumption of the non-essential items has declined implying very low substitutability between food and non-food consumption. It may, therefore, be argued that inflationary expectations based largely o
> n food inflation may not result in a rise in the core inflation. We may, however, need some more observations to confirm or contradict this argument. iii) Although the capacity utilization as per the early results of RBI survey has fallen substantially
> to less than 70% in Q2 of 2019-20, there are several green shoots of growth recovery in the economy. PMI in manufacturing as well as services has shown substantial increase with the latter turning into an expansionary mode from the earlier contraction
> . RBI survey has shown that corporates have turned investors from savers earlier. After a long time, corporates are increasing their physical assets and not financial assets. Transmission of rate cuts in the credit markets is picking up and with the po

> frequency data and advance estimates of GDP for the current year need to be watched carefully to examine the extent and speed of this recovery since it can have implications for the headline inflation. iv) Union Budget for 2020-21 and the Economic Sur
> vey for 2019-20 are due in the next couple of months. As I have argued earlier, the growth recovery has to be addressed fundamentally and durably by the fiscal policy with the monetary policy, if at all, playing only a facilitating role. The stance, co
> ntent and commitment of the fiscal measures outlined in the Budget and the Economic Survey should, therefore, provide extremely useful guidance on the growth concerns. In my opinion, monetary policy should supplement those efforts provided inflation ri
> sks are contained within the given target range. In this context, I would like to repeat my earlier arguments on the concerns about fiscal slippage. When there is a cyclical downturn due to serious growth slowdown, it is logical to expect a fiscal slip
> page even without any change in the fiscal policy parameters. If the estimates of nominal income growth are seriously undershot, revenues are bound to fall short of the target. If under such circumstances, expenditures are cut to maintain the fiscal de
> ficit target, it would amount to a contractionary fiscal policy during a downturn!! Generally, the stabilization policies like fiscal and monetary policies should be counter-cyclical and not pro-cyclical. The fiscal discipline target of 3% of GDP under
> such circumstances should not be overemphasized and can be temporarily ignored. Even though the N.K. Singh Committee has provided for a slippage by 50 bps under such exigencies, there is hardly any rationale for only 50 bps slippage. In my opinion, th

> tion on the monetary front at present. 59. Given all these arguments, it is pragmatic to wait for more clarity to emerge for a firm action on policy rate. In the meantime, the expected better transmission of the past rate cuts will serve the purpose in
> any case. The stance should continue to be accommodative but in this policy, we should hold the repo rate at 5.15%.", modify
label def _cleanedtext 3 "After the last MPC meeting (5th April, 2018), several macroeconomic uncertainties have reduced and a clearer picture is emerging. However, some basic uncertainties still remain on geo-politics, international trade policies and a
> bility of some advanced economies to pursue interest rate hikes. More specifically, I consider the following factors for the repo rate decision in the present policy: (i) Oil prices have further firmed up and geo-political developments indicate no resp
> ite likely on that count soon. For the next 12-18 months, the oil prices are likely to stay at higher level adding to the twin deficits (fiscal and current account) and inflationary pressures. (ii) RBI survey of households for inflationary expectations

> xpected real policy rate in India that is substantially less than our comparator countries like Brazil, Mexico, China and South Africa though it is negative for most other G20 countries. Most of the advanced G20 countries where the real policy rates ar
> e negative are committed to rate hikes over the coming year. Now when the economic growth is firmly on the path of strong recovery in India, growing inflation concerns need to be addressed. 44. The upside risks to inflation such as MSP revision and HRA
> revision implementation by states are likely to be countered by reconfirmed normal monsoon forecasts and the lack of fiscal space in several states. Oil prices could turn on either side and hence present a genuine risk. There are chances that headline
> CPI prints in the coming months (H1) may turn out to be lower than expected by RBI (i.e. 4.8-4.9 per cent inflation) and in such a case, the inflation forecast 12 months ahead may come down. Although such possibilities are not ruled out, their chances
> are less. Under such circumstances, I believe that prudence lies in retaining the neutral policy stance, but increase the policy rate by 25 bps for now. Future course of action should depend on how the scenario on growth and inflation develops.", modi
> fy
label def _cleanedtext 4 "After the last meeting of MPC in June 2019, several important events have occurred. Inflation readings for May and June 2019 were almost as per the RBI projections. While the Economic Survey 2018-19 provided a growth assessment
> very similar to the one by RBI, the Union Budget 2019-20 assumed a substantially higher growth rate for the current fiscal year. Monsoon is likely to be normal. Tariff war tensions have further escalated. Oil prices have continued fluctuating within th
> e range I had mentioned in my earlier statements. Growth impulses are, however, weak on the whole and not significantly picking up for substantial revival. It is well recognized in the literature and reiterated by the Economic Survey 2018-19 that inves
> tment is a primary driver for economic growth and employment creation. In order to boost investment activities, positive sentiments and business-conducive environment need to be enhanced. It requires carrying out several economic reform measures in the
> land and labour markets, tariffs of electricity and other resources, and taxation of income and goods and services, besides urgently correcting prevailing high real interest rates in India. While most of these measures are not within the purview of th
> e monetary policy, correction of high real interest rates to a certain extent is. Since I do not see any major threat to inflation in the foreseeable future, I would like to vote for a 35 bps 10 cut in the policy repo rate to correct high real interest
> rates in order to enhance investment sentiments and revive growth impulses. More specific reasons for my vote are as follows: i) RBI surveys have found that the corporates are now investing more in the financial assets than in the physical assets. Thu
> s, they are turning savers rather than investors. This provides indirect evidence of the adverse impact of high real interest rates prevailing in the economy. Economic reform measures would be more effective if the necessary incentives in terms of cost
> s are there. ii) Fiscal slippage is not a matter of serious concern for the rest of the year, because the Union Budget has maintained the target given in the fiscal consolidation path and the state budgets put together are also not likely to show any s
> erious divergence from the path. iii) The fiscal policy as indicated by the Union Budget 2019-20 on the contrary is on a tighter side rather than expansionary side. The budgeted fiscal deficit this year and projected for the next two years in the mediu
> m term strategy paper are very much on the fiscal consolidation path notwithstanding current slowdown and emergence of substantial negative output gap. As I had argued in my statement in the previous MPC meeting, adhering to the fiscal deficit target d
> uring a downturn of the business cycle amounts to a tight fiscal policy. It is also corroborated by the increased taxation and maintaining expenditure relative to GDP in the budget. The monetary policy has to, therefore, do its bit to provide the boost
> to the economy however short-lived it may be, because currently inflation does not appear to be a concern in the next 3-4 quarters at least. iv) Globally, central banks have not only been dovish in their stance but have also cut their policy rates. v)
> Inflationary expectations one year ahead by households have been declining and the latest round shows about a 20 bps fall over the previous round. If one outlier city is excluded, the fall is much larger. Similarly the business expectations about head
> line CPI inflation one year ahead by the IIMA survey shows the expectation of about 3.7 percent, which is very close to the RBI prediction as well. vi) Thus, there is enough policy space to cut the policy repo rate to correct the high real interest rat
> e in the economy. The transmission of the policy rate cuts in the current cycle is likely to take some time because of the lags involved on account of the nature of the banking business. However, under prevailing circumstances, the immediate transmissi
> on should be considered not so much in terms of the bank deposit and lending rates but more specific rates influencing new investments such as housing loans, vehicle loans and long term bonds. 56. Given that there is a significant policy space to corre
> ct the real rate of interest and thereby helping the economic activities to recover, it is prudent in my opinion to cut the policy rate somewhat aggressively but cautiously keeping some space for future exigencies. As far as the general practice of tak
> ing 25 bps as a unit for cutting or raising the policy rate is concerned, there is no logic or scientific basis for it, particularly when we measure inflation rate, GDP growth rate, fiscal deficit percentage, etc. in single decimal. Ideally, there is a
> case for considering the unit to be 10 bps for cutting or raising the policy rate. I would, therefore, like to cut the policy rate by 40 bps, but I do not mind going with majority opinion of cutting the rate by 35 bps this time, and maintaining the ac
> commodative stance.", modify
label def _cleanedtext 5 "After the last meeting of the MPC in June 2018, the monthly headline inflation prints for May and June have turned out to be less than expected by the RBI and, as I had pointed out a possibility in my last statement, have result
> ed in lowering the forecast for Q4:2018-19. The current forecast of RBI does not show this decline and on the contrary shows an increase by about 20 bps only because it incorporates a remotely possible impact of MSP revisions on the headline inflation.
> Such an impact, on the other hand, is so uncertain even in its existence and definitely in magnitude that experts in the field advise to wait and watch till the revised MSP is implemented on ground by November 2018. There are so many well-known constr
> aints on its implementation that prudence lies in not basing any policy rate decisions till clarity emerges on it. Once we take this crucial uncertain factor out, the rest of the developments do not warrant any change in the status quo even with a very
> conservative view. I, therefore, vote for the status quo both in the policy repo rate and the neutral stance. More specific reasons for my vote are: i) The argument of a pre-emptive consecutive rate hike at this stage pre-supposes: (a) complete failur
> e of the rate hike effected in the June 2018 policy on impacting the inflationary expectations in the economy, and (b) headline inflation forecasts ex-house rent revisions a year ahead increasing further without any uncertainty. Neither of these two pr
> e-suppositions is correct. Although the RBI survey of the household inflationary expectations shows an increase in its median quantum by 20 bps, the proportion of respondents expecting higher inflation 12 months ahead declined noticeably. Moreover, the
> IIMA Business Inflation Expectation Survey conducted in June 2018 (after the repo rate hike by 25 bps) shows a sharp decline in the headline CPI inflation expectation 12 months ahead from 4.67 percent in the April 2018 round to 4.16 percent in the Jun
> e 2018 round. This survey covered more than 1600 companies and shows low standard deviation. There are several reasons why the second pre-supposition is incorrect. ii) The Central and State governments have shown reasonable commitment to the fiscal dis
> cipline in terms of bringing the fiscal deficit down. There is no reason to expect a substantial fiscal slippage this year despite the next year being an election year. 9 iii) GST rate reductions on several items may reduce the inflation marginally. iv
> ) Inflationary expectations of urban households have increased as per the RBI survey because two consecutive inflation readings (May and June 2018) increased. They are likely to fall when the next two consecutive readings (July and August 2018) would s
> how a decline. Even RBI inflation forecasts point to this possibility on account of the strong base effects. If the actual fall in CPI inflation for July and August 2018 turns out to be larger than what RBI projected, their 12 month ahead inflation for
> ecast may also show a reduction. Given the recent track record of RBI in terms of their near term forecasts, this possibility cannot be ruled out. v) Concerns about core inflation are misplaced on two counts: (a) the mandated target for our Committee i
> s headline CPI inflation including food and fuel; and (b) my paper with a co-author in the Economic and Political Weekly (March 3, 2018) shows that inflation dynamics have changed during the last decade such that it is the core that adjusts to the head
> line and not vice-versa. vi) The oil prices have not further increased. If at all, they show a marginal decline from $75 in early June 2018 to $72.5 towards the end of July 2018. All these factors together would bring down the baseline inflation foreca
> st for Q4:2018-19. Only the most uncertain impact of MSP revisions on food prices after 2 or 3 quarters can push the inflation forecast marginally higher. In my opinion, we should not consider such a highly uncertain impact for a rate hike decision. vi
> i)On the other hand, there are disturbing signals and evidences pointing to likely slow down on the growth front. Capacity utilization seasonally adjusted has sharply fallen by 130 bps as per the RBI survey. It contradicts the RBI claim that output gap
> has closed. Actually, it is not getting closed, but is likely to widen creating downward pressure on wages and prices. viii) Corporate performance points to less investment in fixed and financial assets in H2:2017-18 and is also likely to fall during
> 2018-19 as revealed by the pipeline projects up to 2017-18. Bonds and debentures issues by the private sector declined in Q1:2018- 19. ix) Global growth is not likely to sustain. Our exports may not grow at the envisaged rate due to tariff wars and inc
> reased protectionism. x) Real policy rate is already positive and very high compared to most other countries. For businesses, it is well above +2 percent (since their inflation expectation 12 months ahead is only 4.16 percent). It is already adversely
> impacting capital formation. All these factors will put further downward pressure on inflation. 38. This is certainly not the time and environment to hike the policy rate. Nor is it the time to tinker with the policy stance. Prudence lies in maintainin
> g status quo on both.", modify
label def _cleanedtext 6 "Anchoring inflationary expectations, which are shaped by the target, is extremely important in an inflation targeting regime. If there is substantial deviation of inflationary expectations in relation to the target, by failing t
> o react with the policy interest rate, we will lose credibility and reduce our capacity to influence expectations. 32. While I am comforted by the decline in median inflationary expectations of households for the 1-year ahead horizon by 30 bps in the l

> 20-quarter high. Firms expect demand conditions to improve in Q3 FY 18-19 on the back of improved business expectations. Higher inventories indicate that producers are stocking up in anticipation of higher demand in coming quarters. Upward pressure on
> input and staff costs continue to push up selling prices, posing a risk to headline inflation. The most recent PMI manufacturing corroborates this, showing an uptick in input prices and output prices, although the pass through is lower. 37. What worrie
> s me on the pick up in growth is the dismal consumer confidence numbers, with consumer confidence in Q2 FY 18-19 worsening. Ideally, in a growing economy, the durability of growth is better sustained if it is supported by growing consumer confidence. N
> otwithstanding this, I continue to remain sanguine about current and medium term growth prospects as in the last policy. 38. Despite the two hikes in the policy rate in the last two policies, the data since August risks impairing our ability to keep he
> adline inflation durably at 4%. I say this fully cognizant of the trade-off facing the MPC: moving too quickly and needlessly shortening the growth turnaround or, calibrating the rate hikes too slowly, and risking an over-heating in an economy with a n
>
> e flexible. 39. I vote for an increase in the policy repo rate by 25 basis points at today’s meeting of the Monetary Policy Committee. I also vote for a change in the stance from “neutral” to “calibrated tightening”.", modify
label def _cleanedtext 7 "As anticipated by the MPC, inflation turned up in February 2019, lifted by food prices emerging out of five months of deflation. Three features of the upturn are noteworthy. 59. First, the January and February readings of inflat
> ion that became available after the MPC met last in February have undershot the projection made in that meeting. It is reasonable to expect that the March reading - that will become available on April 12 - may reveal that 12 food prices are out of defl
> ation, but headline inflation is still softer than the February meeting projection. I belabour this point because it informs the error correction process that is concurrently taking place. 60. Second, the entire inflation projection path of the MPC's A
> pril 2019 meeting has shifted downwards by 30-40 basis points from its trajectory in the February meeting. This is important in a forward-looking sense because as intermediate variables that provide a first glimpse of monetary policy's unseen and movin
> ar ahead projection of inflation seems to be validated by incoming data. Survey results indicate that households, businesses and professional forecasters have become more optimistic on the inflation outlook than before over the same time horizon. In th
> e case of households, there is also evidence of the anchoring of expectations. Consumer confidence in the inflation outlook remaining benign over the year ahead is rising. Signals extracted from all this information would argue that if the primary targ
> et for monetary policy is likely to be achieved on a durable basis, some space opens up for policy attention to the objective of growth as enjoined by the RBI Act. 62. Given this headroom, the dilemma is two-fold: (1) with growth expected to accelerate
> from 7 per cent in 2018-19 to 7.2 per cent in 2019-20, is policy support really needed? (2) even if the case is admissible, is it the right time to steer monetary policy in defence of growth? Why not exercise prudence and wait and watch for durable si
> gns of underlying pressures on inflation other than food or fuel easing, and/or indications that the slowdown in growth is not a soft patch but a cyclical downswing? This may avoid wasting ammunition. 63. To speak to these questions, the baseline proje
> ing down, with the weakening of sales of fast moving consumer goods implying that consumption spending may be losing steam. Meanwhile, capacity utilisation in manufacturing is running above trend in the absence of investment in new capacity. This sugge
> downside risks. Non-oil non-gold imports have contracted, indicative of weakening domestic demand. 64. Third, I continue to maintain the view that the biggest risks to growth are global. Some of these risks are already materialising. Global growth esti
> mates and projections are being marked down as incoming data confirm the loss of momentum that is underway. Capital flows to EMEs have returned after a turbulent year gone by, but safe haven demand restrains a fuller resumption, and uncertainty in fina
> hown robust growth such as commercial vehicle sales, domestic & international air passenger traffic, and foreign tourist arrivals. The services PMI expanded sequentially in December and January, supported by higher business activity. Credit growth is p
> icking up and is also becoming broad-based. GVA growth in 2018-19 is forecast at 7.2 per cent, which will be a significant improvement over the current year. 64. Although inflation risks have increased in recent months, incoming data should provide gre
> ater clarity about the persistence of inflationary pressures. The economic recovery is also at a nascent stage and calls for a cautious approach at this juncture. I, therefore, vote for keeping the policy repo rate on hold while maintaining a neutral s
> tance.", modify
label def _cleanedtext 11 "Developments on inflation and growth fronts since the last meeting of MPC in December 2017 have been more or less on expected lines. Although the headline inflation was expected to rise in November and December 2017, the extent
> of increase was higher than I expected. However, it is likely to decline during the next 3-4 months on account of favourable base effect and seasonal factors. The expectation about recovery in the growth of GVA remained subdued in the Economic Survey
> 2017-18 in line with what I had anticipated in my statement in the last meeting of MPC. Capacity utilisation continues to be stubborn at around 72 per cent reflecting continued presence of excess capacity in manufacturing sectors. As I have been arguin
> g, the output gap continues to be negative and expanding. Inflation expectations of households 12 months ahead show marginal decline over the previous round in spite of the headline inflation sharply picking up during the survey period. The latest Busi
> ness Inflation Expectation Survey (BIES) conducted by the Indian Institute of Management Ahmedabad (IIMA) with more than 2500 respondents finds that their expectation about costs 12 months ahead has risen by 40 basis points but still remains at 3.7 per
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