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India's general government debt increased notably due to the Covid-19 pandemic, which necessitates a re-assessment of debt sustainability and the role of fiscal policy. The empirical estimation, using data from 1980-81 to 2021-22, finds evidence of cointegration between general government's expenditure and revenue, satisfying the intertemporal government budget constraint. Despite the recent growth in government debt, the paper finds that primary surplus responds positively to an increase in debt using the fiscal policy response function, implying that India's general government debt is sustainable in the long term. [ABSTRACT FROM AUTHOR]

Over the past few decades, the mutual fund industry has witnessed significant growth. Against this backdrop, the paper examines the factors that have facilitated this growth with the objective of providing policy directions. Using a panel of 38 countries for a period of 17 years, the paper conducts an econometric analysis, controlling for country-level heterogeneity, simultaneity bias and endogeneity problems. The results reveal that demand-side factors of income and wealth, real interest rate and investor awareness explain substantial variation in the growth of the industry. On supply side, the main facilitating factors are depth and efficiency of financial institutions and depth of financial markets. The results further reveal that to sustain the growth momentum, advanced countries must manage better the overall demand-side factors, while developing countries must focus on financial development and growth and manage investors' sense of confidence. [ABSTRACT FROM AUTHOR]

This paper analyzes the nonlinear relationship between public debt and economic growth, and also estimates the threshold level for upper-middle income Asian countries for the period 1980 to 2021. The results confirm the nonlinear relationship with public debt threshold of 103.4% for the pooled sample. As for individual samples, the highest threshold recorded is 90.8% for Lebanon and the lowest is 15% for Kazakhstan. The results also reveal that nonlinear relationship can exist in both U-shape and Ո-shape, indicating that beyond a specific threshold level, public debt can support higher GDP growth or drag it down. 'Negative' growth, as noted in the literature, does not necessarily indicate that growth becomes negative, but slower. In addition, debt threshold does not exist by default for all the countries, and therefore, we could not find any threshold for Armenia and Azerbaijan. Another crucial finding is that pooled sample tends to provide higher threshold, compared to individual samples. Hence, it causes a misleading understanding among policymakers. [ABSTRACT FROM AUTHOR]

This paper examines the monetary policy transmission mechanism in Papua New Guinea (PNG) and its impact on the business cycle using quarterly data from 1980Q1 to 2016Q3. The paper explains the short-run dynamic relationship amongst key macroeconomic variables using a Structural Vector Autoregressive (SVAR) model in an open economy setting. The paper confirms that changes in global economic conditions are a material cause of fluctuations in the business cycle in PNG. In contrast, domestic monetary policy shocks play a smaller role in generating business cycle variations in PNG. The paper finds that oil price shocks are more important than commodity price shocks or foreign monetary policy shocks in driving domestic fluctuations. Money supply matters in the transmission of monetary policy, while interest rates contribute modestly to explaining changes in output and inflation in PNG. Monetary policy essentially acts as a stabilizer in limiting the contagion effects of external shocks. [ABSTRACT FROM AUTHOR]

Although financial sustainability has attracted the attention of many researchers, the effect of ownership structure on financial sustainability has been understudied. In this paper we empirically investigate the relationship between ownership structure and financial sustainability of state-owned and private enterprises. We posit that by using debt for investments, the companies would be able to yield higher returns to their equity holders. Our measure of financial sustainability is return to equity holders. To check robustness, we assess return on assets. We use solvency ratios as our regressors. Data for this paper comes from 11 Indian oil and gas companies of which six are state-owned and five are private companies. The data is balanced panel data spread over 10 years during 2013-2022. We apply static Random Effects Model (REM) estimation and dynamic Generalized Method of Moments (GMM) model with orthogonal deviation. The results indicate differences in the effect on financial stability of state-owned and private companies. [ABSTRACT FROM AUTHOR]

The present paper examines the spillover effect of US monetary policy shocks on five emerging market economies--Brazil, Russia, India, China, and South Africa (BRICS). The study aims to compare the impact of the US crisis on the BRICS nations considering three crisis periods--1992 Crisis, 2008 Financial Recession, and 2013-Taper Tantrum. The two models used for analyzing the impression of US policy are Vector Autoregressive (VAR) model and Impulse Response Function. Research proved that the exchange rate and balance of trade of each of the emerging nations are affected by either policy change or unpredictable circumstances that arise in the US. This impact is mostly because of the high trade relations those countries have with the US. Nevertheless, there exist some other factors like economic integration and macroeconomic features, which further stimulate the spillover effect. This paper suggests that the US policymakers should consider such effects during policy formation/change. The paper makes an essential contribution to the existing literature by mapping the footprints of US policies on the five emerging market economies on the premise of pre-crisis and post-crisis spread. [ABSTRACT FROM AUTHOR]

This paper evaluates the relationship between supply-driven components of India's inflation and inflation expectations as derived from the Reserve Bank of India's Inflation Expectations Survey of Households (IESH). To be precise, it determines a threshold level for 'food' and 'combined food and fuel' CPI inflation rate beyond which the inflation expectations start getting de-anchored. The novelty of this study lies in throwing light on the timing of central bank intervention in episodes of supply side inflation with an objective to anchor inflation expectations. The estimation is carried out by using quarterly time series data on inflation and inflation expectations from 2012 to 2022. The results obtained in the study suggest the existence of a inflation threshold level for food at 7-7.5% and for combined food and fuel at 6.5%. [ABSTRACT FROM AUTHOR]

The World Trade Organization’s (WTO) policy of free and fair trade has led to persistent decline in the average world trade tariff rates. It also ensured prior ratification of non-tariff measures implemented by countries. At the same time, countries across the world have introduced trade facilitation measures to ensure smooth flow of goods across borders. Despite these, countries still face substantial trade barriers. Against this backdrop, using data from India, the present paper aims at analyzing the impact of trade barriers on its exports by calculating a bilateral trade restrictiveness index based on tariff, non-tariff and border administrative and regulatory measures. The results show that trade restrictions faced by a country depend on its export basket composition, specific export products and its export destinations and hence are unique to each country. They confirm the existence of substantial trade barriers for a country, as against the general perception that trade restrictions have declined over the years. [ABSTRACT FROM AUTHOR]

At the root of the second wake of export pessimism is the argument that exportled growth (ELG) models suffer from a fallacy of composition. Under constrained global demand, all exporting nations cannot simultaneously pursue ELGs, and the ensuing battle for markets would eventually cause more competitive exporters to drive out or displace less competitive ones. Considering how the Indian economy has witnessed a deceleration in her export of services since the mid-2000s, this paper enquires whether similar export-displacements could have lent to this status quo. Using bilateral service trade data for the years 2005-2015, the paper tests the displacement or crowding out of India’s export of services to advanced OECD nations by exports from other developing and emerging market economies. Our results show the remarkable presence of complementarity between service exports from India and that from other exporting powerhouses like China, Singapore and Vietnam, though the country appears to have been losing markets for her prime services to certain emerging exporters. [ABSTRACT FROM AUTHOR]

The size of green bond market has been increasing rapidly since the Paris Agreement on climate change was adopted in 2015. This paper is an empirical study on the public companies that have financed greenfield projects through green bonds. The study is based on equity investor behavior following the news announcement of green bonds. An event study approach is applied to find out the impact on abnormal returns of stocks during the window period of the announcement day. The study supports that stock return behavior is positive, which is an indication that investors responded positively to the announcement of green bonds. Leverage analysis is also performed, and it is found that the financial leverage increased in the post-issue period of green bonds. It is an indication that the use of low-cost security in financing the greenfield projects is capable of maximizing shareholder returns, if the return on investment is more than the cost of green bonds. This paper adds to the existing literature as it focuses on the stock performance of public companies around green bond issuance announcement. Further, the analysis of financial leverage of the firms distinguishes this study from others. [ABSTRACT FROM AUTHOR]

The aim of intellectual property rights (IPRs) is to protect the rights of innovators, i.e., producers, while the goal of competition law is to protect the rights of end users, i.e., consumers. Therefore, an IP owner runs into conflict with competition law only in the event of a transgression in his capacity as an IP owner if such transgression distorts competition. The conflict between IPRs and competition legislation is still being discussed in the pharmaceutical sector. However, it is a scholarly imperative to evidence concentration before pitting one against the other. To determine how much of an industry's total output is controlled by its largest companies, market concentration ratios can be measured in terms of sales. An economic factor that aids concentration by larger firms in an industry is economies of scale. This paper focuses on the available literature and data to model the economies of scale for bulk drug manufacturers in India. The present work estimates the four-firm concentration ratios of bulk drug manufacturers in India for analyzing the economies of scale. By analyzing the number of patents that are considered proxy for IPRs of firms, it is evidenced that the firms that concentrated the market are also the firms that hold active patents. Hence, it can be concluded that patents serve as positive externalities for firms in bulk drug manufacturing. [ABSTRACT FROM AUTHOR]

Remittance inflows to emerging markets and developing economies constitute a significant portion of external finance. In some of these economies, remittances are an economic stabilizer since they earn largest remittance inflows relative to their GDP. This paper examines the nexus between domestic investment and remittances in 30 emerging and developing African economies. The nexus between migration and development is mainly centered on the importance of remittances as a channel of development and wealth transfer. Panel data analysis, using system generalized method of moments for data spanning 2000 to 2021, was used to determine the nexus. The deterministic relationship suggested a statistically significant and negative relationship between remittances and domestic investment. Policymakers should be cognizant of the remittance trap that can emanate from large flows of remittances if remittances are not fully harnessed to boost domestic investment. Hence, it is essential for them to create investment-friendly environments and ensure that remittance flows are directed towards productive uses that promote domestic investment. [ABSTRACT FROM AUTHOR]

Exchange rate volatility is the most important determinant influencing a country's economic health. A rise in exchange rate risk increases transaction costs and reduces the gains accruing from international trade. The economy of a country is closely dependent on its foreign exchange system. This paper reviews various research studies conducted in recent years on factors responsible for exchange rate volatility and its impact on exports, international trade, trade volumes, FDI, etc. The review reveals that government expenditure, changes in supply of money, domestic and external debts, trade, openness, interest rates, domestic and foreign money supply, inflation, changes in terms of trade, bank intervention, productivity, etc. are some of the factors that make exchange rate volatile. Studies pertaining to relationship between exchange rate volatility and trade present ambiguous views. The review reveals that earlier studies found an insignificant and negative relationship, while recent literature showed a positive relationship between exchange rate volatility and trade, due to advancement in the estimation techniques adopted, like autoregressive distributive lag (ARDL) model, error correction models, etc. The review concludes that there is no unanimity in results, as the magnitude of the effect depends on a number of factors and varies from country to country. [ABSTRACT FROM AUTHOR]

The impact of embedded location options on Indian agricultural commodity futures returns has not been investigated systematically, despite the available anecdotal evidence suggestive of significant impact. Any significant impact on futures returns translates directly to an impact on hedging effectiveness of the futures. This paper investigates whether the addition of a return term due to the location option helps in explaining futures returns better relative to cash market and storage returns alone for the Chana contract when using regression analysis. Relative importance analysis is used to assess the relative contributions of regressors, and regression coefficients are tested for significance. It is found that the adjusted coefficient of determination improves significantly on adding location option returns as a regressor, and its regression coefficient is significant for the majority of the contracts studied. Relative importance analysis of the regressors shows that location option, on average, accounts for 28% of the explained variability of excess futures. These results suggest that location option impacts futures prices and returns significantly and is a key reason for the poor hedging effectiveness of Indian agricultural commodity futures. These results guide exchanges, regulators and policymakers to reduce the impact of embedded location options by optimizing contract delivery specifications to make futures contracts more useful to hedgers such as farmer producer organizations. [ABSTRACT FROM AUTHOR]

Supply chain operations and the use of energy are inextricably interwoven. The supply chains, especially those operating in the food sector, which experience high competition, high implied demand uncertainty, low profit margin etc., are trying very hard to minimize their operational costs to become efficient in the marketplace. On the contrary, inflation has been one of the key issues in food supply chain operations. Irrespective of whether the food product is need-based or demand-based, inflation of essential commodities is experienced by consumers throughout the year. This paper examines how energy price fluctuations have impacted food supply chain prices in India. The time series data of energy and food resources have been modeled and validated using Machine Learning (ML)-based SARIMAX algorithm to find that High-Speed Diesel (HSD) impacts food inflation the most, keeping aside coal. In push-need-based food supply chains, the impact of HSD is relatively higher than in push-demand-based food supply chains. [ABSTRACT FROM AUTHOR]

The paper seeks to identify and estimate the effects of knowledge flows and spillovers from R&D, exports, imports and FDI on the productivity of small and medium enterprises (SMEs). The study proposes a modified Cobb-Douglas production function using the CMIE PROWESS database to estimate the effects of knowledge flows of small firms from their own efforts and spillovers. The results are derived from generalized methods of moments estimator (GMM) and the SYS-GMM estimator. The study has been conducted separately for small enterprises (SEs) and medium enterprises (MEs). Knowledge flows from own R&D have unambiguous positive externality. The study presents evidence of a sizable positive spillover from exporting. It does not corroborate the theorized positive impact of FDI spillovers. It contributes to productivity spillover and knowledge management literature in small firms, establishing that R&D and other knowledge flows contribute to productivity through industry-wide spillover effects. The study arrives at a novel understanding of the impact of knowledge flows and spillovers through R&D and trade on SME productivity at the aggregate and disaggregate levels. It also presents counterintuitive results for the impact of FDI spillover on SME productivity. [ABSTRACT FROM AUTHOR]

Regional integration and capital inflows can be closely related to each other. Enlarged market through regional integration is an attraction for large-scale Foreign Direct Investment (FDI) inflow to take advantage of the opportunities present in the region. The intangibles present in the host countries, the availability of skill set among member countries, investment provision in the agreements and the location of the FDI source countries, among others, play an important role in attracting FDI into the integrated region. The present paper uses a panel data augmented gravity model to study the bilateral FDI inflows into original ASEAN-5 (Association of Southeast Asian Nations) countries after the initiation of trade and investment integration. The dataset for the study consists of 85 bilateral investment country pair for the period 1995-2015 across 14 variables with total data points of 24,990. Estimation techniques such as pooled ordinary least squares, fixed effect with vector decomposition and random effects model are employed to get an efficient estimate. The paper finds that there is a steady increase in FDI inflow into ASEAN countries and ASEAN integration positively influenced FDI inflow into the region. The economic, institutional and infrastructural factors that played an important role in attracting FDI inflow into host countries include per capita income, distance, economic globalization, economic freedom, government integrity in dealing with corrupt practices and telephone density. [ABSTRACT FROM AUTHOR]

In view of the growing importance of good governance as an accelerator of sustainable development, it becomes indispensable to study its determinants. The present paper empirically analyzes the impact of globalization and other macroeconomic variables on the quality of a country's governance. For this purpose, the paper has applied panel Ordinary Least Squares (fixed effects and random effects) and two-step system Generalized Method of Moments (GMM) on a panel dataset of 14 emerging Asian countries, namely, Bangladesh, Bhutan, Cambodia, India, Indonesia, Lao PDR, Mongolia, Myanmar, Pakistan, Philippines, Sri Lanka, Timor- Leste, Uzbekistan, and Vietnam. The econometric analysis is conducted for the period 2005-2017. In general, the results indicate that social and political globalization, urbanization, and information and communication technology infrastructure influence governance favorably, while per capita growth and government consumption have no significant impact on the country's level of governance. A pertinent finding of the paper is that social globalization coupled with economic globalization can lead to an improved level of governance. Thus, improved quality of governance can be attained by blending cultural integration with capital flows. A key contribution of the paper is that it analyzes the impact of various aspects of globalization--economic, political and social--on the level of governance in emerging Asian countries. [ABSTRACT FROM AUTHOR]

The role of Foreign Direct Investment (FDI) in economic development is a well-researched phenomenon. However, extant research has failed to arrive at a consensus on the key drivers of FDI, and the literature is particularly eclectic on the role of natural resources and institutions and how they influence FDI. The present paper argues that this lack of consensus is due to model uncertainty. Drawing on more recent literature on model uncertainty and the determinants of FDI, the paper uses a Bayesian Model Averaging (BMA) approach to find that neither natural resources (oil and gas) nor institutional quality is a robust predictor of FDI flows into 16 countries in the Middle East North Africa (MENA) region. The analysis shows that FDI flows are determined by per capita GDP and oil prices. Given the complexity and volatility of the international business environment, it is more important than ever that economic policy decisions are based on robust models that take into account model uncertainty. [ABSTRACT FROM AUTHOR]

India has formally adopted inflation targeting framework for conduct of monetary policy since 2016. Under this framework conduct of monetary policy heavily relies on inflation projection, and hence success and effectiveness of conduct of monetary policy is critically dependent on the understanding of the inflation dynamics. Drawing from the Stock and Watson (2007) atheoretical approach to understanding inflation dynamics, Gopinath et al. (2021) have found that trend inflation adequately explains the movements of inflation in India. In this paper, an attempt is made to understand what influences movements in trend inflation. The evidence presented supports a statistically and economically significant role for inflation expectations in explaining movements in trend inflation in India, be it headlines, core and food component. There is no evidence of any role for the output gap or slack (in levels) in explaining movements in trend inflation, partly reflecting data challenges associated with the estimation of slack. It is argued that there is merit in according significance to inflation expectations in monetary policy formulations by the Reserve Bank of India. It is also argued that monetary policy action has to respond suitably to the changes in inflation expectations, as the latter is found to be important to shape the inflation dynamics in India. [ABSTRACT FROM AUTHOR]

The paper attempts to assess the interlinkages among the equity markets of SAARC nations by examining the degree of co-movement or association in the long run between the selected subject markets. The time-series data is also tested to examine the impact of shock transmission from one market to another (to-and-fro). The timeseries is tested for stationarity using unit root tests. Further, the paper aims at determining the long-term interrelatedness between four member countries of SAARC--India, Pakistan, Sri Lanka and Bangladesh--using the Johansen cointegration methodology. Further, the impact of shocks from one stock market to another is studied using Variance Decomposition (VD) and Impulse Response Function (IRF). The daily closing prices of principal stock markets are used for empirical investigation for the period April 1, 2013 to December 31, 2019. Results from the study propose that no interrelatedness and cointegration exist among the equity markets of the four countries in the long run. Empirical evidence from the variance decomposition and IRF further reconfirms that the level of integration among the SAARC region is low. Overall, the inferences from the study state that each stock market is influenced by price fluctuations in its own market. Also, due to less stringent regulatory environment of the studied stock markets, accept India, there will be opportunity for QIBs to generate value. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to emphasize the implication of neurofinance with respect to the efficient market hypothesis. To this end, the paper first brings to the fore two aspects of neurofinance, namely, thinking imposes strain on the mind, and making judgment involves emotions, as a result of which some individuals introduce noise to financial markets. The paper then discusses the role of noise traders in making financial markets inefficient. [ABSTRACT FROM AUTHOR]

In view of the constructive role played by urbanization and infrastructure, the present paper aims to empirically investigate the relationship between urbanization, infrastructure, and economic growth. The paper examines this relationship for annual panel dataset of developing countries, viz., Brazil, Russia, India, China, South Africa, Afghanistan, Pakistan, Bangladesh, Nepal, Bhutan, and Sri Lanka, for the period 2008-2016. This is the only study analyzing the impact of urban primacy on economic growth for developing countries. The study has applied panel Ordinary Least Square (OLS) and two-step system Generalized Method of Moments (GMM) techniques. The results indicate that in general, per capita income, urban primacy growth, broadband, and female education favorably impact economic growth. A key finding of the study is that in the long run, per capita income level has a positive relationship with economic growth. The study concludes that urban infrastructure's favorable role in economic growth, in turn, leads to realization of 'agglomeration economics' and controls congestion cost. Based on the results, the paper also provides broad policy implications. [ABSTRACT FROM AUTHOR]

This paper aims at identifying the magnitude of excess returns provided by the shares of an acquirer in a merger or acquisition transaction. In order to do so, the paper studies 352 transactions between January 1, 2003 and April 25, 2018 over the value of $100 mn at announcement involving an Indian listed acquirer. The first part studies the stock returns for a period of two days prior to the announcement until two days after the announcement and is complemented by an analysis of Cumulative Abnormal Returns (CAR) over five-event windows. In the second part, a panel regression is also run to assess the extent to which the stock returns are affected by the market, the mode of payment and deal size. The paper finds a marginal positive abnormal return on the day of the announcement, which seems to fade away by the second day following the announcement. Hausman test is used for the random effects testing with the tested accuracy in panel data. [ABSTRACT FROM AUTHOR]

Compared to the formal or registered sector, productivity of the firms in the unregistered sector is low, and it is widely held that low productivity is due to its small size. Based on the firm-level data generated from the field survey, the paper looks into the relationship between firm size and productivity in the unregistered manufacturing sector of Assam, a state in Northeastern India. Firm size in the study is represented by employment or number of persons engaged in the firms. The study finds that size is not an important attribute of firm productivity in the unregistered sector. Rather, the findings reveal a negative relationship between firm size and productivity. Relatively larger-sized firms are experiencing a decline in both labor and multifactor productivity in the sample. Hence, the paper submits that performance of the unregistered firms may not always be improved by expanding only their size. [ABSTRACT FROM AUTHOR]

Monetary policy has been formulated with the purpose of achieving the twin objectives of economic growth and price stability through the successful working of the transmission mechanism. Monetary policy-induced changes in the nominal variables are expected to impact the real economic indicators like GDP and inflation. The evolution of Reserve Bank of India's (RBI) monetary policy has been divided into four distinct frameworks: pre-monetary targeting, monetary targeting, multiple indicator approach and eventually an inflation-targeting framework since 2015. RBI's monetary policy strategies have undergone substantial transformation in the last 70 years. The success of each monetary policy framework can be assessed by comparing the impact of monetary policy changes on various economic performance indicators. The purpose of this paper is to compare the performance of economic indicators under different monetary policy frameworks in the postindependence period. The economic performance indicators used in the study are inflation and output gap. Analyzing the monthly data from April 1982 to March 2017, the study finds that the multiple-indicator and the inflation-targeting regimes have had most success in balancing the twin objectives of growth and inflation. [ABSTRACT FROM AUTHOR]

This paper revisits the issue of money demand stability in the Indian context by using some variables capturing financial innovation such as equity futures, equity options, and total equity derivatives in a set of money demand specifications. The ARDL bounds test approach to cointegration is employed and a long-run relationship is found in money demand models, including equity futures, equity options and total equity derivatives, in quarterly data spanning from 2001 to 2014. The coefficients of all the derivative variables bear positive signs, indicating the presence of wealth effect. [ABSTRACT FROM AUTHOR]

While existing studies have often focused on the link between Foreign Direct Investment (FDI) and economic growth, empirical evidence on the effect of FDI inflows on human development remains sparse. This paper examines the relationship between FDI inflows and human development in Ghana for the period 1970 to 2019. In order to ascertain the specific effects of FDI on various human development indicators (life expectancy at birth, school enrolment and GDP per capita growth), the structural equation modeling approach was employed. The findings of the study indicate that FDI has a positive effect on life expectancy at birth and school enrolment. This suggests that more FDI inflows to Ghana will improve human development in the country. Thus, the government needs to develop its bargaining power and negotiation skills in relation to its dealings with multinational corporations to attract a favorable type of FDI into the country. [ABSTRACT FROM AUTHOR]

India's youth unemployment rose from 15.5% in 1991 to 23% in 2019. This period also witnessed a declining trend in India's youth to working-age population ratio from 33% to 27%. These statistics are aligned with the existing studies which postulate that if the working-age segment has a large proportion of youth in the age group of 15 to 24 years, it will lead to a high unemployment rate. Given such a context, this paper aims to examine and estimate the demographic, monetary and macroeconomic factors influencing India's rising youth unemployment, with the help of Autoregressive Distributed Lag (ARDL) approach to cointegration. This study also brings in a new dimension to the existing studies by providing an in-depth analysis of the role of millennials cohort, which entered the working-age segment in 1995, in contributing to India's rising youth unemployment. A disaggregated analysis of India's youth unemployment based on the criteria of education and gender has also been carried out. [ABSTRACT FROM AUTHOR]

In India, despite numerous measures adopted by Reserve Bank of India (RBI) to ensure adequate supply of financial services in rural areas, the banking participation by households in terms of owning a bank account is considerably low. The present paper employs Discriminant Analysis (DA) and Logistic Regression Analysis (Logit) technique to determine the unbanked households in rural India using information on various socio-demographic characteristics of the households from National Family Health Survey (NFHS) - 2005-06 data. The unique feature of the paper is that it combines the results from both the methods to improve the predictive accuracy and compares the household-level characteristics that affect the banking participation in the two regions with highest and lowest unbanked households in rural India. Combining both the methods, the paper correctly predicts 95.1% and 83.3% of unbanked households in Eastern and Western region respectively. It is also observed that the number of adults along with their education level increases the probability of being banked, while families belonging to two major minority religions (Muslim and Christian) reduce the probability of the same. While female headship and belonging to SC or ST category reduces the banking participation in Western region, female headship is found to increase banking participation in Eastern region. [ABSTRACT FROM AUTHOR]

India has been facing the problem of continuing depreciation of its currency against US Dollar over the past few decades. Related existing literatures have identified some factors that may have contributed to this phenomenon. The current paper determines the relative importance of each factor towards currency depreciation in India by means of quantile regression analyses. Our analyses suggest that India's increasing Current Account Deficit (CAD), oil and gold imports, and changes in domestic prices relative to world prices (considered to be an indicator of inflation) are the most significant contributors towards depreciating Indian currency. However, the effects of these factors vary across the distribution of exchange rate. [ABSTRACT FROM AUTHOR]

This paper attempts to examine whether there is any fear of currency appreciation among countries which have accumulated foreign exchange reserves beyond what is conventionally required. In this regard, the paper estimates an augmented version of buffer stock model of reserve demand and includes undue appreciation and depreciation of domestic currency as separate explanatory variables. The empirical evidence obtained from a sample of 10 highest reserve holding countries suggests: (i) The motive behind reserve accumulation differs across countries and varies over time; (ii) It is no longer a precautionary balance to absorb shocks; and (iii) The inflow of speculative capital seems to have been a significant factor behind reserve accumulation. More importantly, there is strong evidence of asymmetry in official intervention in the foreign exchange market in the sense that the amount of official purchase of foreign exchange in response to appreciating currency is larger than the amount of selling in response to depreciating currency of the same magnitude. This evidence confirms the fact that high reserve holding countries have the fear of currency appreciation. Although such fear is often attributed to possible export loss, it is largely due to the loss in terms of fall in the value of given stock of reserves due to currency appreciation. [ABSTRACT FROM AUTHOR]

Empirical evidence has indicated that there exists a threshold level of inflation, above which economic growth is hindered. Previous literature has shown that this level is around 1-3% in developed countries and 7-11% in developing countries. This paper tries to investigate the relationship between economic growth and inflation in Egypt by estimating the threshold inflation level during the period 1961-2016. As the paper fails to obtain any optimal rate of inflation and this result is in line with those obtained by most studies in the literature, the paper further examines the role of government spending in explaining the nature of the relationship between inflation and economic growth in Egypt. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of monetary policy stance on trade and foreign investment in the pharmaceutical sector in India. It employs the Bayesian Vector Autoregression (BVAR) approach to construct a model and then studies the said impact by the Impulse Response Function (IRF) analysis. In a Bayesian procedure, the parameters are treated as random variables and their posterior distribution is estimated via the imposition of prior beliefs on their distribution, which makes the analysis more robust when combined with Vector Autoregression (VAR). It has been found that both FDI inflows and exports are impacted by inflation and interest rate changes; however, inflationary pressure has a pronounced impact. On the other hand, GDP growth does not seem to substantially impact both FDI inflows and exports as deduced from the Bayesian VAR with Stochastic Volatility and Time Varying Parameters (BVARSV-TVP) model. These findings have been deduced alongside a benchmark VAR model. [ABSTRACT FROM AUTHOR]

This study addresses the issue of tax evasion from the perspective of the fairness concern by the agents, as these normative considerations make the entire tax policy framework more complex. We model the tax compliance behavior using the structure of Stackelberg game between the fiscal authority (government) and the taxpayer, assuming the taxpayer to be the leader, wherein it may choose to act fairly by complying with the tax code or choose not to comply; while the government as the follower in this computational design can respond by demonstrating fair governance with equal redistribution of the resource or project unfair inefficient governance. Through this method, four scenarios are developed based on the fairness parameter, and the payoffs associated with both the agents are computed and the Nash equilibrium solution of the game is established that favors fair strategy by the government and unfair strategy by the taxpayers. The paper concludes by stating that if the economic agents deviate from the Nash equilibrium strategy by valuing distributional fairness, wherein the taxpayers as the leader comply with the tax rules and voluntarily contribute their fair share, followed by the government participating in fair redistribution of the resources for the welfare of the society and provision of the public good, then it can potentially maximize the joint-profit of both the agents involved in this transaction. Thus, through the Stackelberg model, the paper emphasizes the need for harmonizing the tax coordination rules and imposing tax fairness norms such that it minimizes the behavioral irrationalities. [ABSTRACT FROM AUTHOR]

This paper analyzes the importance of data frequency, time horizon, and assumption of distribution density in modeling symmetric and asymmetric Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models. The paper uses high frequency (daily) and low frequency (monthly) return series of two Indian stock market indices (Sensex and Nifty) spread over long horizon. It analyzes 7,020 daily observations and 347 monthly observations of Sensex spread over 29 years, and 5,971 daily observations and 287 monthly observations of Nifty spread over 24 years. It estimates several symmetric and asymmetric GARCH models on each return series with normal, student's t, and Generalized Error Distribution (GED). The paper further checks model adequacy with Portmanteau test and model efficiency with information criterion. The results are mixed. First, student's t-distribution is appropriate distribution density for daily return series, whereas normal distribution is appropriate distribution density for monthly return series. Next, leverage effect is visible in daily return series, but not in monthly return series of both indexes. For daily return series, ARMA-GARCH models are adequate models, whereas for monthly return series, basic GARCH specifications suffice. ARMA-APARCH(1,1) model is the best fit model for Sensex daily return series and ARMA-EGARCH(1,1) model is the best fit model for Nifty. These two models capture all the stylized facts of return series. For monthly return series, GARCH(1,1) model is sufficient to capture stylized facts. Depending on the results, it is concluded that data frequency, time horizon, and assumptions of distribution density determine GARCH model specifications. [ABSTRACT FROM AUTHOR]

Hydroelectricity is one of the most important sources of renewable power, making it an integral part of emissionless power generation plan for many developing economies, including India. But hydropower firms based on rain-fed rivers in Indian plains and plateaus are highly monsoon-dependent for their generation. The primary objective of this study is to explore the intensity of the risk of fluctuating monsoon rain and securitization of that risk through financial instruments for Indian hydroelectricity sector. The paper analyzes the applicability and efficiency of a designed monsoon derivative in mitigating the monsoon risk of a representative hydroelectricity firm, namely, Damodar Valley Corporation (DVC). The study suggests the use of a weather option contract based on the accumulated monsoon rainfall of the river basin in mitigating the risk. The parameters of such an instrument are estimated and a pricing mechanism is suggested through fitting parametric distribution to the rain data and using a Gaussian copula to capture the interdependencies of rainfall in various locations of the catchment area of the river basin during the monsoon season. The study reveals that the firm can successfully hedge the rainfall risk through financial derivatives and attain a superior position vis-à-vis risk-return. [ABSTRACT FROM AUTHOR]

This paper aims to investigate the effect of political instability and terrorism on Tunisian financial market. Estimation of Power ARCH model between 2005 and 2015 provides support for the negative effect of informal political instability (assassinations and revolution), formal political instability (major government crises and a number of major constitutional changes) and terrorism on the Tunisian financial market. Moreover, the results highlight assassination as a source of political risk, as it has more significant and greater effect on stock market returns as compared to other sources of political instability. Thus, this result is very important for government authorities who should create a security system for all people and in particular for the members of the political parties to ensure the stability and performance of the Tunisian financial market. [ABSTRACT FROM AUTHOR]

Using both primary and secondary data, the paper examines the impact of technological reforms in marine fishing sector on the changes in craft ownership and economic status of the community in Malappuram District of Kerala. The findings illustrate that the reforms caused a complete shift from traditional to mechanized and motorized fishing crafts, which led to the transition from individualistic to collectivistic ownership. This resulted in improved fish production and earnings, besides lowering the working hours among the fishermen. As regards inter-sectoral occupational mobility, although the older generation preferred continuing fishing, the youngsters exhibited tendency towards out-mobility. The findings suggest that fishermen community in the study area could benefit economically by building up capabilities required to match the technological and ownership transitions, besides maintaining the social and ecological elements for sustainable fishing. [ABSTRACT FROM AUTHOR]

This paper analyzes whether technology is a channel for resource curse reversal in resource-rich African economies between 1985 and 2019, employing Pool Mean Group (PMG) framework. Firstly, the study finds that natural resources positively and significantly affect growth in the short run, while in the long run, they exhibit a negative relationship with growth establishing the resource curse hypothesis. Secondly, it reveals that technology affects economic growth positively in both the short and long run. While it is not statistically significant in the short run, it is significant in the long run. Lastly, the interactive effect of natural resources and technology reveals a positive and significant nexus with economic growth in resourcerich African countries. Showing that technology plays a potent role in resource curse reversal in resource-rich African countries, the study recommends that these nations should embrace technology fully to reap the benefits thereof. [ABSTRACT FROM AUTHOR]

This paper deploys the Johansen cointegration approach to investigate the presence of a long-run broad money demand relationship in Australia, using annual data for the period 1970-2008. The empirical results suggest the presence of a long-run relationship between real broad money balances, real output, the yield on Australian Government long-term bonds, yield on the US Government Treasury bills and the nominal effective exchange rate of the Australian dollar. Although the coefficients on these variables bear their expected signs, only the coefficients on real output and the yield on Australian Government long-term bonds are found statistically significant over multiple subsample periods. The stability test results suggest that the broad money demand relationship was unstable during the early 1990s but has gained stability since then. The paper also draws implications of the findings on the design and conduct of monetary policy. [ABSTRACT FROM AUTHOR]

India is a federal country with asymmetric levels of development. The asymmetries are both vertical and horizontal in nature. This paper proceeds in two stages--in the first stage, it decomposes the level and pattern of fiscal dependency of states on the different components of total transfers. In the second stage, it examines the factors that influence the allocation of conditional/discretionary central transfers to the states. The study finds that successive Finance Commissions have gradually enhanced the share of states in the centralized divisible pool over a period of time. It is evident from the overall empirical outcome that states with a larger fiscal space and Gross State Domestic Product (GSDP) growth were able to get more funds as compared to the prevailing political factors during the first and third sub-periods. In all the three sub-periods, interactive dummies have played a significant role in determining the allocation of federal funds to the states. [ABSTRACT FROM AUTHOR]

This paper assesses the technical efficiency and efficiency differences in elementary education system across Indian states by using Data Envelopment Analysis (DEA) and regression model. It considers different educational outcome variables such as enrolment rate in primary schools and upper primary schools, and completion rate in primary schools and upper primary schools for the period 2007-08. The model also includes several inputs hypothesized to impact the output, such as percentage of habitants with access to primary school within 1 km distance and upper primary school within 3-5 km, and percentage of full-time teachers in primary and upper primary schools. Using DEA, the paper is able to separate states that might qualify as performing well from those where some improvement might be possible in terms of efficiency. This could imply a better allocation by the states with usually scarce resources available for elementary education in India. Results show that Delhi, Kerala, Tamil Nadu and Nagaland with relatively high achievement values in education sector are also operating at the efficient frontier. On the other hand, Bihar, Madhya Pradesh, Odisha and Uttar Pradesh have low outcomes, but the problem with these states is that given their current input levels, there is limited scope for improving their outcomes and catching up with the better-off states. It is argued here that adequate inputs need to be made available for such states either by generating and investing more in education sector by the states or by better usage of the existing centrally-sponsored schemes. The study also makes an attempt to identify the determinants of efficiency by using simple regression model. [ABSTRACT FROM AUTHOR]

The interest rate transmission mechanism of monetary policy to real economic activity has been the center of interest of many researchers globally. The aim of this paper is to study the impact of the policy interest rate (both nominal and real interest rates) on the output gap in India for the period from May 2001 to March 2015 using monthly data, and explore whether the Reserve Bank's switching to inflation targeting has hampered the growth objective. The paper uses Autoregressive Distributed Lag (ARDL) cointegration approach to study the long-run and shortrun dynamics of the objective variables. It takes sufficient number of lags to handle the problem of endogeneity mostly present amongst macroeconomic variables. The study finds presence of interest rate puzzle, where the conventional negative relationship between output and interest rate is broken. It suggests the presence of some other factors such as business mood, investment uncertainty, presence of parallel economy or the time period which was dominated by global financial crisis and its aftermath as the possible reasons for the decline in growth rate. [ABSTRACT FROM AUTHOR]

The identification of external and internal determinants of inflation is a perplexing task. Moreover, the spillover impact of these determinants generates indecisiveness in measurement. Therefore, the present paper tries to identify the impact of external and internal determinants of inflation in India by using the time series data from 1978 to 2015. In order to assess the short-run and long-run impact of selected variables, an Autoregressive Distributed Lag (ARDL) bounds approach has been adopted. The ARDL bounds method allows investigating the impact of external and internal determinants on inflation in India and provides long-run stability in the system. The results of the study found that oil consumption has a direct impact on domestic prices. Similarly, due to the increase in employment, inflation tends to increase in the long run. Further, the relationship between deficit financing and the domestic price is found to be negative and significant, whereas the impact of Foreign Direct Investment (FDI) on domestic price is found to be inconclusive in the long run. [ABSTRACT FROM AUTHOR]