Department of Economics and Finance

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Start date: 2020Subject: search.filters.subject.Economic Growth

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Now showing 1 - 10 of 12
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    Does Crude Oil Price Affect the Inflation Rate and Economic Growth in India? A New Insight Based on Structural VAR Framework
    (Sage, 2021-04) Bal, Debi Prasad
    Based on a structural vector autoregressive framework on the monthly data from April 1997 to July 2016, this study is an attempt to show the impact of crude oil price on the rate of inflation and economic growth in India. The results showed that the crude oil price has a positive impact on the rate of inflation whereas an inverse relation exists between crude oil price and economic growth. Further, we segregated the crude oil price into two components, that is, positive and negative partial sum of oil price through the nonlinear and asymmetric autoregressive distribution lag framework. A similar kind of result is derived in the case of positive partial sum of oil price on the rate of inflation and economic growth, while a significant negative relationship is found in the negative partial sum of crude oil price on economic growth. From the policy perceptive, we suggest that policymakers may focus on reducing the consumption of crude oil and using renewable energy for accelerating the economic growth. This would not only prevent the domestic economy from international oil price fluctuations and inflation but also assist in achieving sustainable environmental goal of reduced crude oil use.
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    Impact of sectoral decompositions of electricity consumption on economic growth in India: evidence from SVAR framework
    (Springer, 2022-03) Bal, Debi Prasad
    The study examines the effects of electricity consumption from different sectors such as agricultural, commercial, domestic, industrial (HV), industrial (LV-MV) and miscellaneous sectors on economic growth over the period of 1981–2019 in the case of India. We used SVAR framework and concluded that the consumption of electricity from agriculture sector has a negative impact on economic growth, whereas the industrial (HV and MV-LV) and commercial electricity consumption has positive impact on economic growth. Similarly, electricity consumption by the domestic sector has less positive effect on economic growth. Further, we computed the total factor productivity growth (TFP) by using the DEA method and showed the effects of sector-wise electricity consumption on TFP as the robustness of our analysis. We obtain similar kind of results. From the policy perceptive, the study suggests that the government must speed up the construction of a power grid to improve the availability of electricity for achieving higher rate of economic growth.
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    Labour Force and Employment Growth in India Evidence from the EUS (2011–12) and PLFS (I and II)
    (Economic Political Weekly, 2021-11) Padhi, Balakrushna
    Employment is one of the key building blocks of Indian development policy (Papola and Sahu 2012). Driving growth in the labour and workforce is a critical challenge for Indian policymakers and is a hotly contested issue in political and academic debates. Creating decent job opportunities outside of the agricultural sector has been one of the biggest challenges to confront policymakers in recent decades in their attempts to achieve faster and more inclusive growth. In this regard, India’s low employment growth, termed “jobless growth,” in a phase of high-income growth, has sparked intense debates in the Indian labour market since the turn of the 20th century (Mehrotra et al 2012; Kannan and Raveendran 2009; Srivastava 2016).
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    Revisiting the debt-growth nexus: Evidence from India
    (Economic annals, 2021) Krishna, M.
    The main purpose of this study is to examine the debt-growth nexus in India over the period 1984-2019 using Bayer-Hanck and Autoregressive Distributed Lag (ARDL) cointegration techniques. The findings of both techniques suggest the existence of a negative relationship between public debt and economic growth in the long run. The results also confirm the significant negative relationship between foreign exchange reserves and economic growth. Interestingly, the test results confirm the unidirectional causality running from public debt to economic growth in the case of India. From a policy perspective, reducing public debt is imperative to achieve long-term sustainable growth. Efforts should be made to circumvent the burden of burgeoning interest liabilities by generating a primary surplus, which will facilitate debt servicing and timely repayment of debt.
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    Estimating an optimal debt/GDP ratio: an empirical investigation for Indian states
    (Inder Science, 2021-04) Rao, N.V.M.
    The objective of this study is to get an insight into the debt scenario of different states of India and understand the factors governing it, thereby estimating an optimal debt/GDP ratio for each of them. The study begins with estimating the trend for optimal debt and plotting it parallel to the actual debt for each Indian state for the time period from 2002-2003 to 2014-2015. Modified Blanchard (1983) model was employed for estimating optimal debt/GDP ratio. The results display notable difference between optimal debt/GDP ratios and actual debt/GDP ratios for almost all Indian states. In states where debt/GDP ratio is rising constantly, the governments should aim at achieving a balance between anchoring debt sustainability and high growth yield in the long run. For states where actual debt/GDP ratio is below the optimal level, policy focus should be on providing cushion against external financial crisis and market shocks.
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    Do Institutional Quality and Trade Openness Influence Economic Growth? An Empirical Evidence from India
    (Springer, 2022-03) Giri, Arun Kumar; Mohapatra, Geetilaxmi
    The study empirically examines the impact of trade openness and institutional quality on economic growth in India for the period 1990–2019. The study uses export plus imports as a ratio of GDP and composite governance indicators to measure trade openness and institutional quality, respectively. GDP per capita is used as the proxy for economic growth along with financial development, domestic capital, exchange rate, and inflation as other conventional determinants of economic growth. Autoregressive distributed lag (ARDL) co-integration approach along with the first-generation unit root tests is used in the present study to test empirical relationships. The results reveal that both trade openness and institutional quality exert a significant and positive impact on economic growth in both the long and short runs. Further, the interaction of trade openness and institutional quality is shown to have a significant impact on economic growth as well. The estimates also confirm that domestic capital and financial development have a significant positive influence on the economic growth of the country. The results further indicate that the exchange rate has a significant negative impact on economic growth in both long run and short run.
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    What Shapes Economic Growth in BRICS? Exploring the Role of Institutional Quality and Trade Openness
    (Wiley, 2023-01) Giri, Arun Kumar; Kumar, Arya
    Prior research has identified outward-oriented policies as a far superior approach to achieving economic growth. Whilst trade openness determines economic growth in the short run, institutional quality is critical to long-term viability. However, the direct and indirect effects of institutions have been understudied, particularly for the Brazil, Russia, India, China and South Africa. This study addresses this issue by estimating long-run and short-run elasticities using the system GMM and pooled mean group models and identifying its country-specific impact using the fully modified ordinary least square model. According to the findings, trade and institutions are only short-run complements of economic growth. In the long run, however, the lack of good governance limits the positive impact of trade openness.
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    Technological development, financial development, and economic growth in India: Is there a non-linear and asymmetric relationship?
    (Emerald, 2021-06) Giri, Arun Kumar; Mohapatra, Geetilaxmi; Debata, Byomakesh
    The main purpose of the present research is to analyze the relationship between technological development, financial development and economic growth in India in a non-linear and asymmetric framework.
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    Beyond Growth: Does Tourism Promote Human Development in India? Evidence from Time Series Analysis
    (Korea Science, 2020) Giri, Arun Kumar
    The present study aims to investigate the impact of tourism growth on human development in Indian economy. For this purpose, the study uses annual data from 1980 to 2018 and utilizes two proxies for tourism growth - tourism receipt and tourist arrivals - and uses human development index calculated by UNDP. The study uses control variables such as government expenditure and trade openness. The study employs auto regressive distributed lag (ARDL) approach to investigate the cointegrating relationship among the variables in the model. Further, the study also explores the causal nexus between tourism sector and human development by using the Toda-Yamamoto Granger non-causality test. The result of ARDL bounds test reveals the existence of cointegrating relationship between human development indicators, government expenditure, trade openness, and tourism sector growth. The cointegating coefficient confirms a positive and significant relationship between tourism sector growth and human development in India. The causality result suggests that economic growth and tourism have a positive impact while trade openness has a negative impact on human development in India. The major findings of this study suggest that tourism plays an important role in the socio-economic development of Indian economy in recent years and the country must develop this sector to achieve sustainable development.
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    ICT diffusion, financial development, and economic growth: Panel evidence from SAARC countries
    (Wiley, 2020-12) Giri, Arun Kumar
    This study examines the interrelation of ICT diffusion and financial development with economic growth in SAARC economies, by employing data for the time period 2000–2017. The empirical analysis is carried out using granger causality and cointegration techniques. First generation panel unit root tests namely LLC, IPS, ADF, and PP test were employed for this purpose. All the variables were found to be integrated of order one at first difference. Pedroni's cointegration test along with Kao's residual-based cointegration test was used which reveals the presence of long-run relationship among the variables. Further, cointegration coefficients are computed with the help of fully modified ordinary least squares and dynamic ordinary least squares method. While financial development, ICT diffusion, and trade openness were found to increase the growth rate, inflation exhibited negative impact on growth. Both short-run and long-run causality were examined using panel granger causality test which revealed unidirectional causality running from ICT diffusion and financial sector development to economic growth. However, the result of causation between financial sector development and the ICT diffusion was statistically insignificant.