Determinants of long-term growth in India: a Keynesian approach

Mallick, Sushanta

doi:10.1191/1464993402ps043ra

Cited by 21 publications

(19 citation statements)

References 41 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…1 = 2 . However, if private investment is more efficient and productive than public sector investment, then the estimated coefficient on private investment would be larger than the public investment coefficient, such that 1 > 2 , [9], [10], [12], [38] in particular, emphasise that the importance of the relative size of 1 and 2 , as there remains some uncertainty about whether public sector investment encourages or depresses private investment.…”

Section: Theoretical Framework and Model Specificationmentioning

confidence: 99%

Public and Private Investment and Economic Development in Iraq (1970-2010)

Hussein¹,

Benhin²

2015

IJSSH

View full text Add to dashboard Cite

Abstract-Based on the neoclassical growth model of Solow (1956), this study analyses the macroeconomic determinants of economic growth, examining the effect of public and private investment on economic growth in Iraq from 1970 to 2010.Cointegration and error correction models were applied to the time series data, followed by a Johansen cointegration test of trace and maximum eigenvalue statistics to establish long run equilibrium relationships among the variables in the model. This study also estimated an error correction model (ECM) and the significance of the coefficient on the error correction term confirms the long run relationship between the explanatory variables and economic development. The empirical results suggest that, in the long run, private investment, public investment, growth in the labour force and growth in oil revenues effect real gross domestic product (GDP) positively and statistically significantly; however, price and exchange rate volatility are found to have an adverse impact on real GDP. In light of these results, several policy recommendations are made to conclude.

show abstract

Section: Theoretical Framework and Model Specificationmentioning

confidence: 99%

Public and Private Investment and Economic Development in Iraq (1970-2010)

Hussein¹,

Benhin²

2015

IJSSH

View full text Add to dashboard Cite

show abstract

“…Furthermore, Mallick (2002) investigated influences of factors on economic growth in India from 1950 to 1995 using a VAR model. The study found that economic output depends upon private investment, human capital, real interest rate, and public investment.…”

Section: Empirical Literaturementioning

confidence: 99%

The Relationship among Economic Growth, Trade, Unemployment, and Inflation in South Asia: A Vector Autoregressive Model Approach

Nguyen¹

2018

Asian Journal of Economics and Empirical Research

View full text Add to dashboard Cite

The article aims to investigate the causal relationship among economic growth, exports, imports, unemployment, and inflation in five developing countries in South Asia for the last two decades (1997-2016) using a VAR model. We found that GDP has a negative relationship with inflation, while imports positively affect inflation in South Asian countries. Results demonstrated that there are no directional causalities between GDP, exports, imports, and unemployment rate and other variables in the short run. In contrast, there is a directional causality between inflation rate and other variables in the short run. We also found that there is a long-term relationship among economic growth, exports, imports, unemployment, and inflation in South Asia. Lastly, policies are recommended in order to ensure economic growth and a sustainable development in the South Asia.

show abstract

“…If the government borrows during full-employment equilibrium, it would result in displacement of resources from the private sector for use in the public sector. Given the resources/funds availability in the economy and the private sector demand for the same capital, an increase in government demand for these funds increases the interest rate, which in turn leads to the crowding-out of private investment and setting off recessionary trends (Mallick, 2002). However, the overall impact if interest rate on aggregate investment ceteris paribus (as investment depends on other factors as marginal efficiency of investment and cost of capital depends on the elasticity of investment demand with regard to interest rates.…”

Section: Theoretical Reviewmentioning

confidence: 99%

“…This requirement for an unbalanced budget has been extended by theories in public finance to provide a framework through which a country could borrow to finance development programs in the public sector in order to revive economic prosperity. It should therefore be understood that flexible budgeting is just an extension of classical/orthodoxy theory and its created to accommodate government borrowing as an instrument of fiscal policy (Mallick, 2002).…”

Section: Theoretical Reviewmentioning

confidence: 99%

The Relationship Between Public Investment To GDP Ratio And External Debt Stocks In Kenya

Mweni¹

2016

IJMEI

View full text Add to dashboard Cite

Debt is a two-edged sword. External borrowing for productive investment is associated with macroeconomics stability, increased domestic savings, improved welfare and enhanced debt repayment ability; while over accumulation of debt is associated with increased repayment and debt-service costs, depressed domestic investment, crowding out of private investment and increased vulnerability to debt crisis. The paper sought to establish the relationship between public investment to GDP ratio and external debt in Kenya over the period of 1972-2012. The study used time-series data for public investment, GDP, and external debt from IMF International Financial Statistics database. All data was evaluated, cross-checked, compared and critically analyzed. To ensure that the data does not violate the assumptions of classical linear regression model (CLRM) and test for stationarity, the study tested for unit tests using Augmented Dickey-Fuller (ADF). To test for the verifiability of the estimated long run model, additional diagnostic tests, notably: heteroskedasticity, autoregressive conditional heteroskedasticity (ARCH), autocorrelation and normality, were carried out before regression was used to determine the relationship between external debt and inflation. The gauge the relationship between the external debt and growth in Kenya, a simple open macroeconomic debt growth model will be applied. Regression analysis of Ordinary Least Squares (OLS) will be used to determine the relationship between public investment to GDP ratio and external debt over the 1972 and 2012 period in Kenya. The correlation findings indicated a Spearman's correlation coefficient of -0.5618 with a P value of 0.0001, implying a negative and significant correlation. The regression results show an R square of 0.0067 indicating that 0.7 percent of variations in external debt are explained by variations in total investment/GDP ratio, F statistic of 0.26 and a p value of 0.1828. The study recommends sustaining lower inflation rates through tight fiscal and monetary policies, financing of budget deficit from noninflationary sources, implementation of price stabilization program by subsiding basic food items, and effectively managing external debt.

show abstract

Determinants of long-term growth in India: a Keynesian approach

Cited by 21 publications

References 41 publications

Public and Private Investment and Economic Development in Iraq (1970-2010)

Public and Private Investment and Economic Development in Iraq (1970-2010)

The Relationship among Economic Growth, Trade, Unemployment, and Inflation in South Asia: A Vector Autoregressive Model Approach

The Relationship Between Public Investment To GDP Ratio And External Debt Stocks In Kenya

Contact Info

Product

Resources

About