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.

Network Trade and Development: What Do Patterns of Vertically Specialized Trade in ASEAN Tell Us About India’s Place in Asian Production Networks?

Abstract: At a time when regional production networks have been resurgent, especially in Asia, why has India’s integration in regional markets not been deeper? Using highly disaggregated trade data and firm level field interviews, the paper found that despite low volumes, vertically specialized trade has been growing between India and ASEAN. Overall, we find that there is significant potential for deepening India’s engagement in ASEAN by expanding intermediates exports in the machinery sector, expanding into higher value specialty chemicals exports, unlocking the underexploited potential for growth in the electronics sector and moving up the value chain in the road vehicles and, telecommunications sectors where network exports are already important. Our field level interviews bear out these findings and show that besides the usual policy costs associated with supply side constraints in Indian manufacturing three factors hamper India’s deeper integration in Asian production networks: (i) low value addition in Indian manufacturing which translates into low-value component exports and a high degree of reliance on expensive imports creating a perverse effect on both learning and trade balance; (ii) a janus faced effect on technological change and productivity stemming from relatively low quality standards associated with cost-sensitive demand from domestic buyers and weak exports. This leads to technological stagnation on the one hand, and a growing capital intensity of routine operations on the other. (iii) and finally, despite the rise of export oriented industrial parks and SEZ’s there is a striking lack of an effective institutional eco-system of industrial advantage that agglomeration economies and colocation of interdependent, sectorally specialized firms can bring. Instead, sectoral fragmentation adds to manufacturing costs despite co-location. Although some firms have found innovative ways to cope, the coping costs are high.

Inflationary pressures in South Asia

Abstract: The similarities yet differences across South Asian countries, and their differential response to recent food and oil price shocks, provides a useful opportunity to better understand the structure of inflation in these economies. Analysis of the internal goods market and external balance of payments equilibrium and evidence on demand and supply shocks suggests that output is largely demand determined but inefficiencies on the supply side perpetuate inflation. Pro-cyclical policy amplifies the negative impact of supply shocks on output. Inflation surges are reduced at high output cost while propagation mechanisms and well-intentioned administrative interventions turn relative price shocks into chronic cost-push inflation. The analysis brings out the importance of food prices for the inflationary process. It is necessary to protect the poor from inflation and especially food inflation. But this must be done effectively. The paper concludes with an analysis of effective short- and long-run policy options.

Inequality of Opportunity in Access to Primary Education among Indian Children

Abstract: Every child deserves an opportunity of quality education. If a child's access to education depends on circumstances such as caste, religion, gender, place of birth, or other parental characteristics, then it leads to disparity in access based on circumstances which are beyond the control of a child. This unacceptable disparity (inequality of opportunity) needs to be measured and addressed by policy interventions. Using two rounds of Indian National Family Health Surveys, and concepts of Inequality of Opportunity and Human Opportunity Indices this paper measures inequality arising out of unequal access to primary education for Indian children. The results suggest overall high level of inequality of educational opportunity with substantial geographical variations. Inequality of opportunity in access to primary education reduced during 1992-93 to 2005-06 but the reduction varied considerably across different geographical regions, which calls for regional focus apart from national level policy revisions.

On the Endogeneity of the Money Multiplier in India

Abstract: Citing a break in the statistical association between the broader money aggregates and reserve money in the post-reforms period of the 1990s vis-a-vis the 1980s, this paper argues that an endogenous money multiplier framework is best suited for analyzing the money supply process in India and questions the simplifying assumptions tending to justify stability and predictability of the money multiplier especially in the context of a deregulated financial system with market determined interest rates. An empirical analysis conducted using monthly data for the period April 1980 through March 2000 establishes this and traces the source of the endogeneity of these multipliers to a range of macroeconomic variables.

Stability analysis of Uzawa–Lucas endogenous growth model

Abstract: This paper analyzes, within its feasible parameter space, the dynamics of the Uzawa–Lucas endogenous growth model The model is solved from a centralized social planner perspective as well as in the model’s decentralized market economy form We examine the stability properties of both versions of the model and locate Hopf and transcritical bifurcation boundaries In an extended analysis, we investigate the existence of Andronov–Hopf bifurcation, branch point bifurcation, limit point cycle bifurcation, and period-doubling bifurcations While these all are local bifurcations, the presence of global bifurcation is confirmed as well We find evidence that the model could produce chaotic dynamics, but our analysis cannot confirm that conjecture It is important to recognize that bifurcation boundaries do not necessarily separate stable from unstable solution domains Bifurcation boundaries can separate one kind of unstable dynamics domain from another kind of unstable dynamics domain, or one kind of stable dynamics domain from another kind (called soft bifurcation), such as bifurcation from monotonic stability to damped periodic stability or from damped periodic to damped multi-periodic stability While there are an infinite number of kinds of unstable dynamics, some very close to stability in appearance, there also are an infinite number of kinds of stable dynamics Hence, subjective prior views on whether the economy is or is not stable provide little guidance without mathematical analysis of model dynamics When a bifurcation boundary crosses the parameter estimates’ confidence region, robustness of dynamical inferences from policy simulations are compromised, when conducted in the usual manner only at the parameters’ point estimates