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Non-Performing Assets of Commercial Banks:
A Case Study
-- Rosy Kalra
Non-Performing Assets (NPAs) in the Indian banking system have assumed astronomical dimensions through the introduction of the concept of asset classification, income recognition and provisioning norms by Reserve Bank of India to assess the credit risk of a bank. High level of NPAs in banks has attracted public as well as foreign financial institutions to analyze the reasons for it. In this paper, an attempt has been made to find out the various factors responsible for the huge NPAs. Further, the different characteristics of NPAs on the basis of industry and area (i.e., state-wise as well as region-wise) have been analyzed. © 2011 IUP. All Rights Reserved.
Savings, Investment and Economic Growth in Nigeria:
An Empirical Analysis
-- Ben Obi, Gobna Obida Wafure and Auta Elisha Menson
This paper empirically examines the relationship among savings, investment and growth rate using cointegration and Error Correction Model (ECM) approach. Specifically, savings and investment models are estimated. The series are integrated of order two, i.e., [I(2)]. Long-run relationship among variables is established using Johansen maximum likelihood methods. The econometric analysis shows that investment-GDP ratio lagged by one year, real growth rate of GDP lagged by one year, gross domestic savings lagged by one year and cost of capital lagged by two years are significant determinants of investment. Similarly, real growth rate of GDP, gross domestic investment-GDP ratio lagged by one year and economic liberalization are significant determinants of savings. A robust relationship among savings, investment and growth is identified. The study suggests that given the prevalence of low saving rate and invariably low investment rate, there is the need to adopt a proactive measure that will enhance savings and investment capacity in Nigeria, which in turn, will impact growth significantly. This can be achieved through a policy framework that will ensure an investor-friendly environment and develop human capacity and technology. © 2011 IUP. All Rights Reserved.
Inflation Targeting and Economic Stability
in East Asian Countries
-- G Babu Rao
The present study empirically investigates the success of inflation targeting in reducing inflation uncertainty in East Asian countries, especially South Korea, the Philippines and Thailand. An attempt is made to examine whether inflation targeting has any impact on inflation variability in the countries adopting inflation targeting in East Asia. The study makes use of monthly data on Consumer Price Index. The study period spans from January 1970 to May 2010. This provides a rich dataset for the analysis, but some of the indices were introduced recently. The present study has undertaken a comprehensive set of econometric techniques, such as unit root tests, parametric tests (autocorrelation and variance ratio tests) and ARCH-GARCH tests. Towards this end, empirical results of parametric tests provided largely show inflation uncertainty. Finally, the study concludes that inflation targeting has good impact in reducing inflation variability and improving economic growth in South Korea, the Philippines and Thailand. © 2011 IUP. All Rights Reserved.
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