4 results
Search Results
2. LINKAGE BETWEEN INCOME AND GOVERNMENT EXPENDITURE AT INDIAN SUB-NATIONALS: A SECOND-GENERATION PANEL COINTEGRATION TECHNIQUES.
- Author
-
Nayak, Dinesh Kumar and Hazarika, Bhabesh
- Subjects
- *
PUBLIC spending , *BUSINESS cycles , *FISCAL policy , *BUDGET , *COINTEGRATION - Abstract
This article examined whether the Wagner's law that represents the long-run relationship between income and public expenditure holds at the subnational level in India. It also examines whether the Wagner's law is revenue expenditure specific or capital expenditure specific in the context of Indian sub-nationals. The paper covers 21 Indian States and a time period of 40 years, from 1980-81 to 2019-20. In this study we have assessed six pairs of relationships among state-level income, public expenditures, revenue expenditure, capital outlay, public expenditure on economic services, public expenditure on social services, and expenditure on the developmental sector. The validity of the law was examined for nine different panels of states broadly under income categories and geographical regions. Unlike first-generation panel techniques, which fail to account for the aspects of cross-sectional independence and heterogeneity, the present study tests the validity of the Wagner's law using the second-generation panel unit root method and cointegration approach. The analysis adopted Panel Dynamic Ordinary Least Square to test the evidence of Wagner's law hypothesis. The findings reveal that Indian states are heterogeneous in terms of public expenditure, and there exists cross-sectional dependence. There also exists a long-run cointegrating relation between state-level income and state-level public expenditure. For the full sample, while this study finds holding Wagner's law, there is a mixed validity of the law in different panels across income categories and regions. In addition, it is observed that the validity of Wagner's law in the Indian Subnational context is mainly driven by the high-income major states, and it is more capital outlay centric. To conclude, these responsive affiliations comprehend the effectiveness of public expenditure as a fiscal policy instrument in stimulating economic growth and the contribution of economic growth in the budget exercise at the subnational level. Therefore, subnational governments need to be more strategic to ensure growth momentum as the public expenditure indirectly and directly causes the living standard and welfare of the people in the economy. It must be acknowledged that India adopted fiscal rules in 2005, which may limit the procyclical fiscal policy during the swings in the business cycle, and thus have implications for budget exercises at the subnational level. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
3. News, noise, and Indian business cycle.
- Author
-
Goyal, Ashima and Kumar, Abhishek
- Subjects
BUSINESS cycles ,KALMAN filtering ,GROSS domestic product ,STOCK exchanges ,NOISE - Abstract
New Keynesian dynamic stochastic general equilibrium models with various specifications of technology, markup, and interest rate shocks are estimated with Indian data using Kalman filter based pure and Bayesian likelihood estimation. Preference and interest rate shocks are found to be important for output determination, whereas markup and interest rate shocks are important for inflation. News, as contained in stock market variables and arising from anticipated interest rates, affects growth of gross domestic product. Interest rate shock is anticipated at horizon of one quarter and out of total variance explained by interest rate shock, one third is due to the anticipated shock. Anticipated interest rate shock diminishes the share of preference shock in output determination. Although markup shock has a large share, its persistence is low. There is evidence that permanent component of technology is not well anticipated. Once we incorporate this, technology shocks affect output more, although they still remain much below US levels. Implications for policy include forward guidance on interest rates, less reaction to short‐term supply shocks, and allowing technology shocks to play out. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
4. Strategic Positioning of the Firms, Market Competition and Economic Recession in India: A Cross-Sectional Analysis.
- Author
-
Shanmugan, K., Javiya, Vishal, and Joshi, Darshna
- Subjects
ECONOMIC competition ,RECESSIONS ,CROSS-sectional method ,BUSINESS cycles ,CAPITALISM ,SIMULTANEOUS equations - Abstract
History of business economic cycles suggests that the market economy is subjected to fluctuations and that can be observed and predicted more meaningfully for the understanding of behavioral interactions of economic agents including institutions. Considerable amount of empirical analysis pertaining to firms' growth, expansion and survival during recession has demonstrated growth potentials of the firms which are ideally synchronized with all the operational areas of the firm's conducts and performances while focus has been laid down more on production, labor productivity and market share. Our proposed agenda is to examine how strategies have influenced the competition and competitiveness under broad scenario of recession in India nearly for five years and more particularly after the impact of covid-19. The simultaneous equation model is constructed which comprises of structural specifications consistent with the theory by netting the framework that are compatible and coherent. Persistent dynamics produced in the market by consumer, producer and retailer has a long bearing on firms' behavior both in terms of its strategy and long-term objectives. Although, combinations of strategies adopted during recession reveal both price and non-price competition strategies have been followed aggressively, as per our estimates, cut throat price competition strategies have evolved in complementing the firms' strategic positioning and market competition. [ABSTRACT FROM AUTHOR]
- Published
- 2021
Discovery Service for Jio Institute Digital Library
For full access to our library's resources, please sign in.