Search

This paper analyzes the cause-effect relation between national milk supply and the price paid to Brazilian producers. It also seeks to model the expected returns on a monthly basis for the price of milk paid to producers in Brazil. Logarithmic returns of domestic supply and price of milk are used to perform cointegration and causality tests, followed by modeling to predict the future price of milk in Brazil. The results suggest that although the variables are not cointegrated, there is a causal flow running from national milk supply to domestic price of milk, while the causal flow in the reverse direction is far less expressive. Finally, the relative predictability for the price of milk is specially focused through autoregressive modeling. [ABSTRACT FROM AUTHOR] more...

The need for an empirical macroeconometric model with an appropriate theoretical basis has markedly grown in recent years. This is largely because under the new economic policy regime, introduced two decades back, different segments of the economy have increasingly been driven by the market forces and are more strongly linked with each other. In particular, the domestic economy has fairly and strongly got connected with the international markets through trade and capital flows. A clear understanding of how the economy functions and how it is likely to perform over the ensuing years has become necessary for the policy makers, drivers of the corporate sector and all major stakeholders. This paper intends to review how such models have been designed so far and how we may benefit from the past experience to formulate new models relevant for the current situation. The work on macroeconometric modeling must involve a fruitful interaction between those in charge of data collection, those responsible for policy formulation and academic researchers. It is necessary to ensure that the resulting models are reliable, have a proper policy focus and are analytically sound. Such modeling effort has to be an ongoing activity because the models in question need to be regularly updated and revised to reflect fresh information and new economic issues that come up every now and then. Such models must be regularly used for forecasting the ensuing trends and in analyzing important policy initiatives. [ABSTRACT FROM AUTHOR] more...

The paper examines the nexus between growth and primary energy consumption in Portugal, using the Autoregressive Distributed Lag (ARDL) bounds test approach with annual time series data from 1965 to 2008. Portugal is a medium-sized economy which has experienced several episodes of economic expansion and stagnation that make it of particular interest. Portugal is constrained by external energy dependency and is faced with the policies of energy preservation due to international commitments and initiatives, such as the Kyoto Protocol and Directives of European Union, that potentially may have deep implications for its economic growth. Empirical results suggest that energy causes growth in the long run and short run, but growth only causes energy consumption in the short run. Therefore, an energy policy to promote consumption constraints on energy will reduce GDP growth in Portugal. [ABSTRACT FROM AUTHOR] more...

The National Stock Exchange (NSE) of India was ranked the first in terms of trading of individual stock futures in the year 2007. Financial derivatives like stock futures have always been accused of causing instability in the spot market. This paper investigates the effects of individual stock futures expiration on the underlying stock market in the NSE. Using daily data of 42 sample stocks of high market capitalization, this study has found positive abnormal return and also abnormal volume on days prior to the expiration day. [ABSTRACT FROM AUTHOR] more...

The global price surge in food and energy in recent years has put considerable strain on consumers. This is especially so because food and energy are the elements of consumer's non-discretionary spending. Confining interest to the working class in Lesotho, this work is an attempt to quantify the welfare impact of food and energy inflation. Using the representative agent with constant returns-to-scale Cobb-Douglas preferences, the paper evaluates two complementary approaches to determine the welfare impacts of price increases on the workers. The standard of living evaluation is captured by the agent's reallocation of income proportions between food, energy and other discretionary spending items. The other approach is computing the income adjustment required to immunize the worker from the effects of price increases. Low income workers are hardest hit by food and energy inflation, while the high income workers are least affected. These two approaches seem to be complementary because the percentage fall in the representative worker's standard of living requires roughly the same percentage increase in disposable income to be restored. Consequently, low income workers should be awarded the highest percentage raise in income, while the high income workers should receive comparatively low percentage increase in income. [ABSTRACT FROM AUTHOR] more...

This paper mainly attempts to examine the causal nexus between Gross Domestic Product (GDP) and savings (at 1993-94 prices) in India, using the annual observation from 1950-51 to 2002-03. Although a number of studies have shed light on this issue using time series data, the present study attempts to analyze the relationship between the variables using cointegration and causality models. The results show the presence of cointegration between the GDP and savings series implying the presence of a stable long-run relationship between them. Having verified that GDP and savings are cointegrated, the Granger test indicates the absence of any causal relationship between the variables in log-difference form. Despite the absence of Granger causality, a negative coefficient of the error correction term in the regression equation of savings on GDP is observed. This negative coefficient signifies that savings converge to its long-run equilibrium level. [ABSTRACT FROM AUTHOR] more...

In addressing the issue of short-run heterogeneity as well as long-run homogeneity of the estimated coefficients in a panel framework, the Pooled Mean Group (PMG) estimator (Pesaran et al., 1999) has gained popularity in applied research in economics and business recently. This estimation method has been used successfully in the context of bilateral trade balance estimation for the US with its major trading partners (Goswami and Junayed, 2006), and in another context the bilateral exports and imports model has been extended by modeling bilateral inpayments and outpayments separately for Japan and its major trading partners (Bahmani-Oskooee and Goswami, 2004) by using Autoregressive Distributed Lag (ARDL) approach to cointegration on a partner-by-partner basis. The major limitations of these kind of bilateral models is low power and resulting wrong sign and insignificance of the estimated coefficients due to functional misspecification, multicollinearity as well as omitted variable bias which call for a panel setup in the light of bilateral framework. The present paper fills this gap in the existing literature by estimating both the equations of bilateral inpayments and outpayments for Bangladesh vis-à-vis its 15 major trading partners for the period 1973Q3-2004Q2 using the PMG estimation. The paper reveals that the speed of adjustment measured by the short-run error correction coefficients is lower in PMG estimation compared to ARDL estimation. This might raise another important research question that panel framework may provide better estimates for major parameters of the model in the long run at the cost of allowing lower speed of adjustments in the short run. [ABSTRACT FROM AUTHOR] more...

The Einstein relation which is known as the Fluctuation-Dissipation (FD) theorem in physics is applied to financial time series data in this paper. The fundamental equation for the time series is the generalized Langevin equation with colored noise. The autocorrelation function and the probability density function are derived from this equation and the Einstein relation. Those functions are then fitted to the sample autocorrelation and the histogram by means of nonlinear regression and all the parameters in this formalism are estimated consistently. This paper shows that the Einstein relation is useful in the stochastic time series analysis. [ABSTRACT FROM AUTHOR] more...

Recent developments in global finance and the world economy have demonstrated some of the shortcomings in the widely-applied equilibrium-based modeling approach. In this paper, the global E3MG model (www.e3mgmodel.com) has been applied to assess the impacts of the crisis that began in 2008 with the so-called credit crunch. E3MG is a sectoral input-output model (including the banking sector), based on the system of national accounts. The model includes 20 global regions and uses annual time series data. E3MG's parameters are estimated using error-correction methodology, making it an almost unique tool in being able to assess short-term sectoral impacts, as well as long-term trends. Using E3MG, an analysis of the crisis and current (January, 2009) policy measures has been build up through a series of carefully-defined scenarios, simulating aspects of behavioral changes within the banking sector and in the wider global economy. The results help to explain the mechanisms through which the real economy has been impacted by the crisis and give an indication of the effectiveness of current policy. Finally, the paper considers the effects of policy measures designed to restore confidence in the global financial system that are coordinated at the global level, following the 'seven-point plan' outlined in Barker (2009). [ABSTRACT FROM AUTHOR] more...

This paper estimates the aggregate import demand function for Latin American and Caribbean countries, using the dynamic panel data methods, over the period 1975-2005. Consistent with theoretical postulates, this paper finds that the demand for import responds negatively to an increase in the relative prices and positively to an increase in real income. The results imply that fiscal or monetary policies may be used as policy instruments to keep inflation at a reasonable rate so as to rectify any trade imbalances. In addition, for a sustainable trade balance, the development of more local industries should be encouraged to lower the import content. [ABSTRACT FROM AUTHOR] more...

This study investigates how household inflation expectations relate to realized inflation, and uses biased expectations hypothesis (BEH) to understand the association between inflation expectations and realized inflation in the food sector. Household survey data, wholesale price index (WPI), and consumer price index (CPI)-based data on inflation are used in the study and the data was sourced from the Reserve Bank of India (RBI) and Ministry of Statistics and Program Implementation, Government of India. The obtained results were cross-validated using auto-SARIMAX algorithm in a machine learning (ML) framework. The study finds that expected and realized inflation have significant causal relationships; this further supports BEH and reveals how household inflation expectations impact actual market inflation, and vice versa. Hence, these are broadly complementary. However, changes may occur in these aspects, and households and markets must prepare for these changes and plan their future accordingly. [ABSTRACT FROM AUTHOR] more...

The study examines the role of foreign direct investment (FDI) in shaping the export trajectory of the Indian automobile sector. The study uses VECM technique to determine the existence of cointegration between FDI inflows and exports of automobile industry, and to check the long-run and short-run dynamism among the variables. It uses annual time series data on exports and FDI inflows in the industry by considering Indian rupee real effective exchange rate (REER) and world GDP as control variables. The study finds that FDI inflows positively and significantly affect the exports of automobile industry in India in the long run. The findings also validate the J-curve theory of effect of depreciation on the exports of automobile industry that depreciation of Indian rupee has a favorable effect on the exports or trade balance of this industry. The study finds a significant relationship between FDI inflows and exports in only one direction, i.e., running from FDI inflows to exports of the industry. Furthermore, the results show that there is bidirectional causality between India’s rupee REER and FDI inflows in automobile industry. The results suggest that providing a conducive environment to foreign players would positively impact the exports of the automobile industry. [ABSTRACT FROM AUTHOR] more...

Money is a medium of monetary policy transmission. In this connection, no other macro-behavioral function is subjected to more modeling modifications and regression rigors than the macro-money demand function. Monetary policy planning hinges on the parameter estimates of the money demand function. An emerging market economy undergoes structural change in the sector GDP composition unlike a structurally-invariant advanced economy. This is likely to introduce bias in the income elasticity parameter estimate especially. The present study investigates this using the Herfindahl (H) index as a proxy for the GDP composition concentration. The 1-3 years deposit rate and call money rate are alternately used for the opportunity cost variable. Maximum likelihood estimates have shown a statistically highly significant positive coefficient for the H variable besides equally highly significant scale and opportunity cost variables with their expected respective signs. This empirical evidence suggests that the conventional specification contains a serious specification error. The implication of the result is that as the sector GDP concentration increases, the demand for real money balances also increases though quite less proportionately, indicating the absence of any economies of GDP concentration. [ABSTRACT FROM AUTHOR] more...

The study examines the causal relationship between Green Entrepreneurship Ecosystem (GEE) and Sustainable Development (SD) and its key drivers in the short and long term using ARDL model. It uses Global Sustainable Development Index (GSDI), Economic Development Index (EDI), Social Development Index (SDI), Environmental Sustainability Index (ESI) and Green Entrepreneurship Ecosystem Index (GEEI) as proxy variables for social, economic, social and environmental development, and GEE, respectively in a simultaneous set of regression equations. GSDI, EDI, SDI, ESI and GEEI related data were used for 34 countries for the period 2000-2019. The empirical findings reveal that GEE would be useful to boost social, economic and environmental development in the long term. The impact of GEE on social and economic development was negative in the short run, while environmental development would be positive in enhancing economic and social development, and GEE in the long term. The Granger causality test was also used to check the cointegration, and short- and long-term causality of explanatory variables with respective dependent variables, and the results are presented. [ABSTRACT FROM AUTHOR] more...

This study focuses on the relationship between carbon emission and economic growth in Nigeria from 1970 to 2013 by employing carbon emission, real gross domestic product, capital investment, and trade openness in the analysis. Error correction model is used and the results clearly show that in the first period, economic growth positively impacts carbon emission, while it negatively impacts carbon emission in the lagged period. It is also revealed that trade openness and capital investment positively impact carbon emission in Nigeria. Thus, it is recommended that since a reduction in GDP (in an attempt to curb carbon emission) can harm the country's economic progress, it is expedient to look for ways to promote green growth in the country. Policy makers must put in place measures that guide against the dumping of environmentally unfriendly products into the country, and in order to ensure that the capital investment does not contribute to carbon emission in the country, Nigeria can use its infrastructure deficit to leapfrog to greener investments by using environmentally sound technologies and innovations that are currently available. [ABSTRACT FROM AUTHOR] more...

The number and coverage of the free trade agreements across the world has increased significantly in recent decades. The belief that removal of market access barriers enhances economic gain has made many developed and developing countries enter into several bilateral, regional and multilateral trade agreements. The Regional Comprehensive Economic Partnership (RCEP) is one such trade agreement that 10 ASEAN members and its five trading partners have entered into. In this context, the present study attempts to estimate the cost and benefit of joining RCEP for India in two different scenarios. First, using the SMART partial simulation analysis, the study finds that if India joins RCEP, the trade deficit could widen by as much as $23.9 bn annually. Second, the empirical estimation by employing an augmented gravity model shows the relative low impact of tariff on trade among RCEP partners, compared to other explanatory variables in the model. Based on the findings, the study concludes that India's decision to not join RCEP is a wise one at this stage. [ABSTRACT FROM AUTHOR] more...

The study examines the impact of bank-specific and macroeconomic factors on the profitability of Indian scheduled commercial banks. The analysis is based on the panel data of 71 scheduled commercial banks in India for a period of 15 years. Traditionally, banking performance is measured by return on assets, and factors such as bank size, operating efficiency, credit risk, Non-Performing Assets (NPA), Ratio of Interest Income (RII), cost of funds, capital ratio, deposit ratio, ratio of priority sector lending, liquidity and asset management are used as bank-specific factors. GDP, inflation, interest rate, demonetization and financial crisis are used as macroeconomic factors. Linear regression model is used with pooled, fixed and random effect methods. The results show that bank-specific factors such as operating efficiency, NPA and RII have a statistically negative impact on ROA, while asset management has a favorable influence. In terms of the effect of macroeconomic determinants, the results show that GDP, interest rate, demonetization and financial crisis have a negative effect, while inflation is coefficiently negative but has an insignificant impact on ROA. [ABSTRACT FROM AUTHOR] more...

The concept of Coupling Coordination Degree (CCD), which originated in Physics, refers to the phenomenon of variety of interactions between two or more systems and how they affect each other. This study applies the concept to four important Indian sectoral indices, namely, Banking, Automobile, Foreign Institutional Investors (FII) and Domestic Institutional Investors (DII), to understand their interactions in the economy. Using data from FY2010 to FY2019 as a research sample, the CCD of the above-mentioned sectoral indices is measured. The result shows that in recent years, the coupling between the automobile and the banking industry is at a higher level due to several factors including foreign investments. This suggests that policymakers should concentrate more on foreign investments for the development of the economy. The coupling coordination between DII and automobile sector has been very strong for the past three years, which may help the authorities to formulate more effective policies. [ABSTRACT FROM AUTHOR] more...

Monetary authorities, in order to have an accurate assessment of the timing and effects of their policy on the economy, must have an understanding of the monetary transmissions that are present in their economies. Many studies on developing countries, whose financial system is characterized by the absence of organized markets for securities, presence of capital controls, and ceiling on bank borrowing and lending rates, have shown that credit channel is present. Since the beginning of the 1990s, there have been many structural and economic reforms and subsequent transition to new policy regimes in India, which has made the analysis of monetary transmission gain importance. This study examines the transmission of monetary policy in India. Considering the external constraints on monetary policy, a benchmark VAR model is used to examine the presence of bank lending channel, asset price channel, and exchange rate channel. The results suggest that bank lending channel plays an important role in the transmission of monetary policy, which aligns well with the theory, as India is a developing country. [ABSTRACT FROM AUTHOR] more...

Malaysian economy has remained largely open to trade and investment in the last two decades. Over the years, Malaysia has established several trade agreements with different countries, including India. The present study focuses on the trade relationship between Malaysia and its FTA partners with special emphasis on Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA). It first assesses Malaysia's FTA policies in a larger context with the rest of the world, before analyzing the tariff commitments and the initiatives taken by Malaysia and India with the signing of MICECA. The study also looks at the potential sectors where Malaysia can possibly engage in a strong trade with India. It attempts to analyze whether the increased trade of Malaysia with its FTA partners has stimulated FDI inflow into Malaysia from its FTA partners by using Granger causality test for the period 2004-2011. The results of separate analysis show that total export and total import does not Granger-cause FDI from the FTA partners. Further in context of manufacturing, a causal relationship between FDI into manufacturing and manufacturing export could not be established between the FTA partners. However, at one lag, the results suggest the direction of causality between total trade with its FTA partners and total FDI inflow from its FTA partners. [ABSTRACT FROM AUTHOR] more...

This study empirically tests the applicability of the debt overhang hypothesis in Zimbabwe using time series data covering the period 1980 to 2009 by analyzing the relationship between economic growth and external debt (termed as direct debt hypothesis), using cointegration analysis as well as the causal relationship between external debt and investment (termed as indirect debt hypothesis), and also using Granger causality tests. Regression results from the growth model indicate the presence of a debt overhang in Zimbabwe as evident from the negative relationship between external debt and economic growth, while those from the external debtinvestment model show the absence of an indirect debt overhang. [ABSTRACT FROM AUTHOR] more...

Income inequality and poverty in Nigeria are closely related. This study decomposed change in poverty in Nigeria into the growth and redistribution components using income and expenditure. Household survey data collected by the National Bureau of Statistics in 1998 and 2004 were used. Results show that in 2004, income inequality was higher in rural areas than urban areas. Income poverty head count in 1998 was 40.51%, and this increased to 51.59% in 2004. However, expenditure poverty head count decreased from 62.22% in 1998 to 54.37% in 2004. Within the limit of possible poverty lines, rural poverty was significantly higher than urban poverty during the two periods. Income growth reduced poverty where positive growth was obtained and redistribution reduced poverty where the Gini coefficient declined and vice versa. It was asserted that expenditure data are by far better than income for poverty assessment and recommended that welfare enhancing programs that will benefit urban/rural poor should be identified, while better economic opportunities should be created for those in rural areas in the process of the on-going economic reforms in Nigeria. [ABSTRACT FROM AUTHOR] more...

The improvement of the trade balance of India vis-à-vis Canada can be attributed to the devaluation of Indian rupee as a part of the reform program in July 1991 and the subsequent depreciation of the Indian currency owing to the managed floating exchange rate regime. However, but for the increasing inflation in the post-reform period, the result could have been more in favor of India. Thus, the obvious policy prescription for India is to reduce the inflation rate so that the impact of devaluation and depreciation will be more prominent on the trade balance, at least with Canada. This suggestion can be tentative as inflation in India could have been unavoidable owing to its other compulsions. However, the negative response of export of India to its GDP and its perceived fluctuation in the short run could be a major cause of concern to the policy makers. [ABSTRACT FROM AUTHOR] more...

Doubts have always remained in the claim of foreign aid contributing towards the economic growth of the recipients. This paper, therefore, aims to study the effects of aid on the Tanzanian economic growth, the largest aid recipient in average, through Autoregressive Distributed Lag (ARDL) modeling. The relevancy of the presence of sound policies in affecting the effectiveness of aid is also studied and an index for policies is constructed. The results show that aid contributes positively towards the Tanzanian economic growth and sound policy would enhance the effectiveness of aid, although it is not a necessity. [ABSTRACT FROM AUTHOR] more...

Most work on mineral dependent economies use simple and straightforward calculations to estimate the level of dependency on the mineral sector. Typical assessments by researchers on mineral dependency look at the contribution of the mineral sector to total exports, its share in GDP, or the share of mineral revenues in total government revenues. Empirical research on the inter-sectoral dependencies between the mineral and non-mineral sectors is, however, quite rare. In this paper, the inter-sectoral relationships between the mineral sector, represented by oil, and the non-mineral sectors in Oman since 1967, have been investigated using VAR and multivariate cointegration techniques and Granger causality tests. This modeling procedure will provide an understanding of the potential links between oil income and non-oil sectors growth and its impact on the overall economy. While also highlighting important policy and development strategies, the results reveal important information about sector dependency and the dynamics of the oil and non-oil sectors. [ABSTRACT FROM AUTHOR] more...

The paper attempts to study the nature and structure of the urban labor market in Coimbatore. It analyzes the determinants of earnings of the unorganized labor market in the engineering industry, studies the occupational mobility and its determinants, and ascertains the factors associated with social security of the workers. Two industries—foundry and pump—are chosen for the study, based on the number of units and employment of very large number of people. To make the study reliable, the sample size has been restricted to 10% in case of engineering units and 30% in the case of workers on a random basis. The sample constitutes 1,022 workers, of which 537 are from the foundry industry and the remaining 485 are from the pump industry. [ABSTRACT FROM AUTHOR] more...

Globalization is an inevitable phenomenon. In this study, globalization is defined as a process of growing interdependence between all nations of the world. This linkage is encouraged by market liberalization, and information, communication and transportation technologies. Iran's economy has been shaped by oil export, so the industry and service sectors are mainly dependent on the oil income. But the dependency of the agricultural sector on oil income is very less compared to the other sectors. In 2004, this sector contributed 13.7% to Iran's Gross Domestic Product (GDP) and about 25% and 20% to occupation and Iran's non-oil exports, respectively. This situation shows that agriculture sector, though the smallest sector, plays an effective role in Iran's economy. Its production capacity is large and is capable of exporting to international markets. The results of this paper reveal that globalization has had little impact on Iran's agriculture. But, there is a meaningful difference between the quantity of agricultural production, exports and imports after and before 1995. Moreover, despite some fluctuations in the Intra-Industry Trade (IIT) and the Level of International Trade (LIT) indices, the trend lines of the IIT and LIT indices in general show increasing trend after 1995. [ABSTRACT FROM AUTHOR] more...

An effective institutional framework is essential to sustain growth in output, efficiency and capacity of the utility service sectors. The regulatory agency is intended to provide the 'high quality institution' , which permits and fosters sustained growth in capacity and efficiency in utility service industries. While analyzing sustained economic growth of any state, the supportive role extended by these institutions should be taken into account. The present paper provides an assessment of the effects of privatization and regulation on the power sector of Orissa, India. [ABSTRACT FROM AUTHOR] more...

Generally it is believed that the central monetary authority can, and should, exercise control over the exchange rate only in case of fixed/pegged exchange rate regime. However, such a regulation is essential even in an economy that has adopted floating exchange rate policy. This is because no economy can stay immune to the extreme external shocks that affect the domestic economic stability through exchange rate channel. These shocks may be due to changes in the trade balance and relative terms of trade, purchasing power of the two currencies, capital movements, and differences in the general price levels of the two economies under consideration. Especially, when the economy is open to capital movements, the expectations regarding forward exchange rate play an important role in deciding the capital flows as well as the actual exchange rates in future. And, if unguarded, the fluctuations in the exchange rate can cause deep financial crisis in any economy regardless of its size and dependence on the external sector. This paper makes an attempt to define such a relation between the capital movements and the forward exchange rate through the Covered Interest Parity (CIP) model. Monthly data from April 1996 to May 2008, relating to Indian and the US economies, are used for establishing this hypothesis. A comparative analysis of the CIP model with the Uncovered Interest Parity (UIP) model indicates that the former is more efficient in projecting the forward exchange rate movements with greater accuracy. The ability to forecast the future exchange rate based on the same model is an added advantage of adopting the CIP for monitoring the exchange rate and capital movements in India. [ABSTRACT FROM AUTHOR] more...

This paper is an attempt to model the volatility of the equity data of the two Indian stock markets. The study found volatility clustering in the daily returns of indices. Different GARCH models were estimated for various indices of NSE and BSE, the two premier Indian stock exchanges. GARCH(1, 1) with MA(1) in the mean equation was found to fit better than the other models. The models were used to test the spillover effect between the benchmark indices of the two Indian markets, to test for the possibility of volatility transmission within a country and between the two exchanges. The study found volatility transmission between the two markets. [ABSTRACT FROM AUTHOR] more...

Finance is one of the effective tools in spreading economic opportunities. Wider access to adequate and timely finance helps both the producers as well as consumers in raising their welfare status. The increasing gap between demand and supply of financial services has led to the 'exclusion' of large number of rural population from formal financial institutions. As a response to the failure of formal financial institutions in reaching the poor, the 'microcredit' or more broadly 'microfinance' approach was innovated and institutionalized in the Indian rural credit system. It was aimed at overcoming the twin problems of formal credit system—non-availability and poor recovery performance of the existing rural credit institutions. As a result, Microfinance Institutions (MFIs) have made inroads into the rural areas to improve and extend timely, easy and adequate access to financial services. In this context, the present paper examines the nature and type of new institutions that emerged in the Indian financial system to include the excluded. The study finds that SHG-bank linkage and MFI models are the two dominating microfinance approaches in the post-financial reforms in India. The study also finds that the microfinance sector in India is growing with the genesis of new institutions on the one hand and, on the other hand, the NGOs are transforming themselves into financial institutions and entering the business of microfinance. The study concludes that the suitable regulatory environment is the prime concern for sustainable delivery of microfinance in India. [ABSTRACT FROM AUTHOR] more...

The effect of real exchange rate on trade flow enables effective planning and management of exchange rate risk. This paper seeks to examine the impact of real exchange rate volatility, Real Gross Domestic Product (RGDP) and Bilateral Real Exchange Rates (BRER) on Thailand's exports to its two major trading partners, Japan and the US. It is revealed that there are significant evidences that the RGDP of Japan and the US have a positive impact on Thailand's real exports. The Thailand-Japan bilateral exchange rate is also found to be negatively linked to Thailand's real export. Consequently, Thailand should consider reducing its exchange rate misalignments and diversify its export portfolio away from the US. [ABSTRACT FROM AUTHOR] more...

This paper presents new evidence concerning the relationship between relative factor endowments, productivity and specialization. Using a recently developed dynamic panel data fixed effects estimator, the study evaluates the effect of factor endowments in comparison to the effect of productivity on specialization in different sectors of the economy. The study reveals that productivity has more influence in determining industrial specialization than factor endowment. The study concludes that on average, a developing country's machinery sector benefits from investment in capital accumulation and technology. [ABSTRACT FROM AUTHOR] more...

This paper examines the relationship between stock indices of Malaysia and the emerging East Asian countries, namely South Korea, Taiwan, Hong Kong and Japan. The cointegration analysis found a long-run relationship between the stock indices of Malaysia and South Korea. The results of the Granger causality suggest no evidence of any causality between the stock indices of Malaysia and Japan. Whereas in the short run, a unidirectional causality running from stock indices of South Korea and Hong Kong to that of Malaysia were detected. Conversely, stock indices of Malaysia and Taiwan showed bidirectional causality. [ABSTRACT FROM AUTHOR] more...

This paper describes how the frequency domain analysis provides an alternative approach to time domain analysis of a given time series. Spectral and periodogram analyses of a given time series are performed to detect trends and seasonalities in the data. A cross-spectral analysis is done to find causality and comovements in two different time series. Univariate frequency domain analysis is done using time series of varying nature including simulated white noise process, random walk process, AR(1) process, Wolfer's Sunspot data and Box-Jenkins Airlines data; while bivariate (cross-spectral) analysis is done for macroeconomic variables such as money in circulation and inflation. [ABSTRACT FROM AUTHOR] more...

The paper attempts to show that adherence to fiscal policy rules not only makes the state government move towards long-term fiscal sustainability, but also helps in reorienting its expenditure. It states that, in order to bring in balance between financial rectitude and welfare optimization it is essential that subsidies are channelized to targeted groups while monitoring important risks such as interest rate, expenditure on irrigation projects and scholarships. Further, it contends that institutional integrity and political will are critical in achieving the objectives set out in Fiscal Responsibility and Budget Management (FRBM) Act. [ABSTRACT FROM AUTHOR] more...

The present world economy has, increasingly, been interconnected in terms of small units such as industries, regions and national economies as discontinuous systems. Changes in these systems have varied impact across the world economies. This paper tries to trace out various triggers, trails and travails of the present crisis, with a view to suggest solutions or treatments for the global financial crisis of 2008-09. For instance, one of the triggers identified is the prolonged implementation of low interest rate policy. This, coupled with the savings glut in the world economy has led to sub-prime lending in the US, as it was used to finance the US mortgage debts. The author indicates that some new lessons have been learnt from the current financial crisis, the most important of them being the need for retooling the finance and economics models. Further, globalization, along with its bestowed benefits, brings in increased frequency and spread of financial and economic crises. [ABSTRACT FROM AUTHOR] more...

Malaysia's rapid economic growth has given rise to the realization of distributional objectives for achieving its ultimate goal of national unity. Reducing poverty and income disparities among races, income groups and regions is continuously emphasized by the Government of Malaysia in the country's series of national development plans. This paper concentrates on the significance of Foreign Direct Investment (FDI) in poverty reduction across the states of Malaysia. In the econometric analysis, a set of panel data covers eight sub-periods over the period 1984-2005. All the 13 states and 3 federal territories of Malaysia are taken into account in the analysis. The FDI-poverty model selected is in the log-linear form and the FDI inflows into the manufacturing sector is the only explanatory variable. The empirical results show that the FDI coefficient has a statistically significant negative sign, suggesting that the poverty incidence could be reduced by increasing FDI inflows into the Malaysian states. [ABSTRACT FROM AUTHOR] more...

This paper investigates the direction of causality between exchange rate and trade (exports and imports) for a developing country like Pakistan, utilizing the monthly time series data covering the period 1995-2006. Cointegration and causality tests were conducted to assess the link between trade and exchange rate. The results of Johansen-Juselius (JJ) cointegration tests indicate that there is one cointegrating vector between exchange rate, exports and imports. However, an important finding of this empirical research is that there is a strong and stable relationship between exports and imports, and the causality is bidirectional. This study also rejects previous findings about negative effect of exchange rate volatility on trade volume in a developing economy like Pakistan. [ABSTRACT FROM AUTHOR] more...

This paper examines the bid-ask spread of underlying stocks around the introduction of Single Stock Futures (SSF) in the National Stock Exchange (NSE), in order to ascertain whether SSF trading has any liquidity effect on the underlying stocks. Using both high frequency and daily data from January 1, 2001 to December 31, 2002 on a dataset consisting of 28 stocks on which stocks futures were traded from November 9, 2001 in the NSE, the study shows that the liquidity of underlying stocks has increased as there is considerable decline in both spread and return variance in the post-futures period. This decline in spread may be attributed to the SSF trading, as existence of futures market prompts informed traders to migrate to futures market so as to capitalize on the trading flexibilities available there. Consequently, the dealers in the spot market reduce spread as they need not incur any adverse selection cost for trading with informed traders. Besides, with shift of well-informed traders to futures markets, better information is incorporated into the prices. This leads to reduction in volatility of spot market. This decline in volatility helps dealers to reduce spread as inventory risk associated with maintaining balanced inventory decreases. Thus, it can be concluded that introduction of SSF in the NSE has resulted in improvement of liquidity in the cash market. [ABSTRACT FROM AUTHOR] more...

This study analyzes the disparities in household expenditure on education up to the elementary level in Uttar Pradesh (UP). It analyzes social status defining variables along with some household environment variables in the most populous state of India. This study focuses on the role of caste, class (economic class), and their interactions in influencing the household education expenditure with respect to localities/sector, gender and type of schools in UP. It used secondary data from the 71st round of the National Sample Survey Office (NSSO). A total of 36,479 urban and 29,447 rural households having children aged 5-29 years, receiving any type of education were surveyed. Using 'Tobit model', it finds inequality existing at different levels. The study suggests strengthening of the economic structure of lower income classes (irrespective of caste) by providing more employment opportunities and continuing financial support, and also trying to implement a universal curriculum structure in all types of schools. Further, there is a need to strengthen the management system and ensure the accountability of teachers in government schools. [ABSTRACT FROM AUTHOR] more...

We examine the relationship between the business cycle and the capital buffers held by Indian scheduled commercial banks using the bank level unbalanced panel data from 1995 to 2020. We control for other potential determinants of the excess capital, such as the cost of capital risk profile of the bank, adjustment costs, size, loan to asset composition and unobservable idiosyncratic features. They may themselves have a cyclical behavior. The present study finds significant negative relationship between the capital buffers and the business cycle, and an average 1% rise in the Gross Domestic Product (GDP) growth rate leads to 0.14% of capital buffers in India. Our sample period consists of all the regimes of capital accords Basel-I, II and III. [ABSTRACT FROM AUTHOR] more...

Owing to globalization, there has been a significant policy shift towards outwardlooking market-oriented developmental strategies, which is more evident in the developing world. This trend has led to a remarkable increase in Foreign Direct Investment (FDI) inflows as a means of acquiring technology and skill contributing to the overall economic development of a country. Since FDI offers to channelize resources towards productive activities, this has propelled researchers to investigate the role of FDI in promoting growth, more particularly in developing economies. The growth literature reveals a shred of conflicting evidence regarding the growthperformance of FDI. So, the present study serves to be an addition to the existing literature conducted to re-examine the FDI-growth linkage using recent data over a relatively long period for the fastest growing Brazil, Russia, India, China and South Africa (BRICS) economies selected meticulously for being representative developing economies and significant players in attracting inward FDI. Using the cluster regression estimation method for random effects over the period 1987-2018, the study finds a significant positive impact of FDI on the economic growth, thereby supporting the growth-enhancing role of FDI. [ABSTRACT FROM AUTHOR] more...

We augment an otherwise standard business cycle model with a richer government sector, and add a modified Cash-in-Advance (CIA) considerations. In particular, the CIA constraint of Cole (2020) is extended to include private investment and government consumption, and allows a proportion of total expenditure to be done using credit. This specification is then calibrated to Bulgarian data after the introduction of the currency board (1999-2018), which gives a role to money in accentuating economic fluctuations. In particular, the modified CIA constraint produces a mechanism that allows the framework to reproduce better observed variability and correlations among model variables and those characterizing the labor market in particular. [ABSTRACT FROM AUTHOR] more...

The study aims to assess the impact of directors' report on the stock returns of selected firms. The sample considered for the study includes Nifty 50 companies, excluding 12 banking and financial firms for five years, i.e., from 2013-14 to 2017-18. Five parameters from the directors' report, i.e., Activity (AC), Optimism (OP), Certainty (CE), Realism (RE) and Commonality (CO), are considered as independent variables, whereas stock return is considered as the dependent variable. Beta, market capitalization and debt-equity ratio are control variables. The study applies panel fixed and random effects model and Panel Vector Auto-Regression (PVAR) to examine the impact of directors' report on stock returns. The study observes unidirectional causality from OP and CE to stock returns. Reverse unidirectional causality is observed from stock returns to CO. The study further reveals that CO and CE negatively impact stock returns. The implications of the study for the stakeholders of the companies are: first, they need to follow the directors' report in addition to financial statements and second, the kind of information which is important for them is related to CO and CE features of the report. The study contributes to the existing literature by using content analysis on directors' report and its impact on stock price. It also analyzes the informational dynamics between the content analysis parameters and stock returns. [ABSTRACT FROM AUTHOR] more...