Journal of Indian School of Political Economy

Purna Chandra Parida ¹, Hrushikesh Mallick ², Maathai K. Mathiyazhagan ³

Affiliations
1 RBI Endowment Unit, Institute for Social and Economic Change (ISEC), Nagarabhavi, Bangalore-72, IN
2 Economics Unit, Institute for Social and Economic Change (ISEC), Nagarabhavi, Bangalore-72, IN
3 Economics Unit, ISEC, Nagarabhavi, Bangalore-72, IN

Abstract

This paper examines the dynamic relationship between fiscal deficits, money supply, and price level in India during the period 1960-61 to 1999-2000. Using vector autoregression (VAR) econometric methodology, which allows variables to be treated as potentially endogenous, the study finds that fiscal deficits and money supply are both influenced by each other. Further, it reveals that the price level does not influence either the fiscal deficit or money supply but rather is being influenced by both the variables.

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Purna Chandra Parida ¹

Affiliations
1 National Council of Applied Economic Research (NCAER), Parisila Bhawan, I.P. Estate, New Delhi-110002, IN

Abstract

This paper examines the impact of both productive and unproductive public expenditure on economic growth of two Asian giants, namely, India and China during the period 1980 to 2004. The unwarranted rise of military expenditure in south Asian sub-continent, particularly in India and China, and the creeping decline of public expenditure on education encourage us to examine the impact of these factors on real GDP. Nevertheless, we are also keen to know the growth led effects on expenditure patterns of these two countries. In this context, we have applied cointegration and VECM techniques to know the long run and causality relationships among the variables of interest. The empirical findings of the study suggest that both countries required better human capital than high security to foster higher real GDP. Further, it finds that military expenditure and human capital are influenced by higher levels of real GDP in these two countries.

Keywords

Human Capital, Security and Economic Growth.

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Purna Chandra Parida ¹

Affiliations
1 Director, National Institute of Labour Economics Research and Development (NILERD), Narela, Delhi - 40, IN

Abstract

The demonetisation policy declared by the Government of India on 8th November 2016 was aimed at weeding out black money in the economy and putting a check on counterfeit currencies perceived to be used for terror funding. Expanding the base of the formal economy and achieving incremental changes in digital transactions were other two important objectives. But this policy shock was viewed unwarranted as it could potentially distort the economic activities at least in the short run. The pros and cons of this policy have been extensively debated and discussed in the print media and policy circles. However, it is found that there is dearth of empirical evidence on impact of this policy shock on economic activities. In this context, using econometric analysis, the present study found that there was no significant impact of demonetisation on the overall economic growth rather the impact was limited to a few sectors. Similarly, the impact of demonetisation on inflation was more pronounced in the case of food prices only. Nevertheless, an important policy implication of demonetisation has been revolutionisation of digital transactions during the post-demonetisation period.

Keywords

No Keywords.

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