ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by N R BhanumurthySubscribe to N R Bhanumurthy

On the Dynamics of Time-varying Fiscal Multipliers

The dynamic transmission and the effectiveness of the Indian public expenditure shock are analysed. The article uses a time-varying parameter vector autoregressive model with stochastic volatility to compute the time-varying Indian public expenditure multiplier and employ Bayesian regression consequently to examine its determinants.


Understanding Systemic Symptoms of Non-banking Financial Companies

The riskiness of banks (public and private) and non-banking financial companies listed on the stock exchange is examined by measuring their extent of interconnectedness at the lowest tail (1%) quantile. Using the macro risk and balance sheet variables under the directional connectedness framework, this study finds the underperforming periods of Indian banks and NBFCs. The findings are consistent with the systemic risk rankings of the Reserve Bank of India for the domestic banks and systemically important NBFCs.

Public Expenditure, Governance and Human Development

Madhya Pradesh is a state that is "off-track" in achievement of most of the Millennium Development Goals, with wide variance on development outcomes between districts. This study examines the link between public expenditure, quality of governance and human development outcomes in the state, and finds that development expenditure by itself is insufficient in achieving human development at the district level. Public expenditure has better outcomes in districts with better governance indicators, indicating the need to focus on improving governance mechanisms as well as increasing development expenditure.

Stimulus, Recovery and Exit Policy: G20 Experience and Indian Strategy

There are large variations among the g20 countries in their deceleration experiences, transmission mechanisms and their current macroeconomic outlook. In an integrated global economy, it is essential that the major economies coordinate their policies. But coordination does not imply simultaneous stimulus withdrawal from all g20 countries. Indeed, a phased withdrawal is probably the best guarantee against the risk of a negative global shock leading to another recession in the event of a simultaneous stimulus withdrawal from all g20 countries. Hence, this paper argues that each country needs to set the timing, scale and composition of its stimulus withdrawal keeping in mind its own macroeconomic outlook.

Macroeconomic Fundamentals and Exchange Rate Dynamics in India

The present study investigates the relative importance of macro (interest rates, inflation, etc) and micro (order flows, information, etc) variables in determining the short-run exchange rate movements. Empirical analysis is based on a primary survey of the Indian foreign exchange dealers. It finds from a survey that a majority of the dealers feel short-term changes in the Indian rupee/US dollar market are basically influenced by the micro variables such as information flow, market movement, speculation, central bank intervention, etc. One of the findings of this study, which has policy implications, is that the dealers feel speculation would increase volatility, liquidity and efficiency in the market and, central bank intervention reduces volatility and market efficiency.

Forecasting State Domestic Product and Inflation

At present, states in India make their own assessment regarding economic growth for their planning and budgeting purposes. These assessments are mostly derived from judgments rather than from serious econometric modelling. The regional econometric model developed in this paper aims to forecast growth rates of the aggregate and sectoral GSDP for the three states. It attempts to capture the medium-run trends and characteristics of the economy of each state, taking into consideration the structural changes in the Indian economy during the period.

Industrial Recovery: Can It Be Sustained?

The current recovery is mostly engineered by the strong performance in agricultural output and comes after the poor performance of domestic industry last year. Much needs to be done to sustain this trend in the coming years. Most importantly, some of the structural bottlenecks that have been plaguing the domestic industry for so long need to be addressed and the long pending labour market reforms and ambiguities in the disinvestment process should be cleared soon. Measures to attract more FDI in the infrastructure sector and reduce the 'hanging investment' component will contribute to this continued recovery.

Stability of Demand for Money

This is with reference to the paper ‘Experience with Monetary Targeting in India’ by Deepak Mohanty and A K Mitra in EPW (January 16-23, 1999). In the paper the authors evaluate the monetary targeting exercise in India.

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