Indira Gandhi Institute of Development Research

About: Indira Gandhi Institute of Development Research is a facility organization based out in Mumbai, Maharashtra, India. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 307 authors who have published 1021 publications receiving 18848 citations.

A SVAR approach to evaluation of monetary policy in India

Abstract: After almost 15 years, following the flagship exchange-rate paper written by Kim and Roubini (KR we revisit the widely relevant questions on monetary policy, exchange rate delayed overshooting, inflationary puzzle and weak monetary transmission mechanism in the Indian context. We further try to incorporate a superior form of the monetary measure called the Divisia monetary aggregate in the KR in terms of impulse response (eliminating some of the persistent puzzles), variance decomposition analysis (policy variable explaining more of the exchange rate fluctuation) and out-of-sample forecasting (LER forecasting graph). Further, we do a flip-flop variance decomposition analysis, which leads us to conclude two important phenomena in the Indian economy, (i) weak link between the nominal-policy variable and the real-economic activity (ii) Indian monetary authority had inflation-targeting as one of their primary goals, in tune with the RBI Act. These two main results are robust, holding across different time period, dissimilar monetary aggregates and diverse exogenous model setups.

Government expenditure in India: Composition, cyclicality and multipliers

Abstract: We first assess the fiscal space and cyclicality of total Indian Central Government expenditure and its major components. Next we estimate multipliers for total, capital, and revenue expenditure. We extend the Structural Vector Auto-Regression (SVAR) to include supply shocks and the monetary policy response sequentially and together. The long-run capex multiplier is much larger than the revex. Capex also reduces inflation more over the long-term. Despite this, capex is more volatile. Monetary policy accommodates capex and tightens in response to revex, but absence of active accommodation during supply shocks reduces the capex multiplier. Implications follow for fiscal-monetary coordination.

Interlinkages between external debt financing, credit cycles and output fluctuations in emerging market economies

Abstract: This paper examines the role of external debt financing (EDF) in shaping the credit cycles and the joint implications of EDF flows and credit growth for the output volatility in ten major emerging economies. We find that extreme phases—known as surge and stop episodes—in EDF flows are significantly associated with credit surges and stop episodes as shown by a panel multinominal logit estimation. However, the association is asymmetric—EDF stop episodes are more likely to bring about a credit stop episode compared to the occurrence of credit surges due to EDF surges. The results suggest vulnerabilities of credit cycles of EMEs to the sharp movement in EDF flows which in turn is typically synchronized with global liquidity conditions. In the second part of our analysis, using the bias-corrected LSDV estimation for the dynamic panels, we find that EDF flows and credit jointly have a strong amplifying impact on the output volatility. Moreover, EMEs also face large output volatility when EDF stop and credit stop episodes occur together. The results implicate a broader welfare loss in the form of output fluctuations due to a strong synchronization between external debt financing and domestic credit conditions. Significant output fluctuations are also a cause of concern for policymakers in EMEs who seek to insulate their economies from external and domestic financial shocks.

Tourist Arrivals in India: How Important are Domestic Disorders

Abstract: The Indian Tourism Industry has flourished in the past few years, significantly contributing to the nation's Gross Domestic Product, foreign exchange earning and employment. India with her enriched natural beauty is unambiguously one of the most viable candidates for promoting tourism. Since the past few years, Government of India has undertaken various measures to promote tourism; but its' benefits has not attained the maximum. This paper is an attempt to analyse empirically the determinants of international tourist arrivals in India using annual data from 1966 to 2000. The results document that socio-political factors, viz. communalism, terrorism and Indo-Pak tensions place serious threats to the tourism industry putting limits on the gains that could have been potentially realized.

Adoption of Zero Tillage Farming: Evidences from Haryana and Bihar

Abstract: In this study we have proposed an econometric modelling of the factors effecting the adoption of the zero tillage farming, using the primary data collected from two representative districts of Haryana and Bihar. The impacts of the diffrent socio-economic factors such as the availibility of credit, total land owned by the farmer, his age, farming experience, village community meetings and the effect of exposure to mass media have neen analysed inthe context of ZT technology adoption in India. We find that credit, farming experience, total land holding and mass-media exposure have positive impacts whereas age has a negative impact on technology adoption. It is seen that factors such as village community meetings, farmer fairs and family size influence technology decision differently (sometimes opposite) across the two data sets. This could be due to the presence of unobserved sample specific effects in the data that are significant but inestimable.