Changes in the Money Supply Process
and Its Impact on Monetary Policy Transmission
in the Indian Economy
-- Prashobhan Palakkeel
The monetary scenario in the Indian economy has changed significantly in the post-reform period. The stability of the
relationship between alternative monetary measures has been questioned in several studies. The changes in the structure of the money
supply process have crucial implications to the transmission process of monetary policy. Although some of the earlier studies indicated
the changing monetary scenario in the Indian economy, the implications of the new developments have not been addressed properly in
the literature. The developments necessitate a reinterpretation of the conventional explanations of the transmission process. Among
the studies which looked into the monetary policy dynamics in the Indian economy, some of the post-reform studies tried to explore
the transmission mechanism in detail. The present study identifies that most of the transmission channels are working in the
economy. However, the dynamics has changed with respect to the changes in the monetary relationships. The relationship between interest
rate and exchange rate has changed significantly due to the influence of stock prices on foreign exchange inflow. On policy grounds,
the results from the present study have some serious implications.
© 2009 IUP. All Rights Reserved.
True Economies or Forced Economies:
Do Indian Funds Compete Under the Shadow
of Regulatory Ceilings?
-- T S Somashekar
This paper studies the behavior of open ended equity funds and medium- and long-term debt funds in India under regulatory cost
and management fee ceiling constraints. It attempts to see if competition renders regulation unimportant. Smaller equity funds spend
lesser on marketing and waive a portion of their management fee to keep expenses below the ceiling. This tendency disappears as we reach
the highest asset class which also appears to face diseconomies of scale. When controlled for regulatory cost ceilings, there are
no economies of scale present. Debt funds are not constrained by regulatory cost ceilings as much as by the need for them to deliver
better returns with decreasing debt returns and high equity returns. Their expenses and management fee are much below regulatory
ceilings throughout all asset classes and tend to reflect true economies.
© 2009 IUP. All Rights Reserved.
Market Timing Ability
of Selected Mutual Funds in India:
A Comparative Study
-- B Phaniswara Raju and K Mallikarjuna Rao
The objective of this paper is to explore the market timing ability of selected Indian mutual fund managers, which is a vital aspect in
the success of a mutual fund. In order to measure the market timing ability of the fund managers, two important models, namely
Treynor and Mazuy and Henriksson and Merton, have been used with the BSE Sensex and NSE Nifty as market proxies. The results indicate
that a majority of the selected mutual fund scheme managers are not seriously engaged in any market timing activities and are
relying mainly on stock selection skills. Further, fund managers of private sector exhibited better market timing as per Henriksson and
Merton model. These results are similar to those reported by other researchers utilizing data from Indian mutual funds. The results
reported here are also in line with those for the developed capital markets.
© 2009 IUP. All Rights Reserved.
Testing for Convergence and Catching-Up
for Kedah with the Rest of the States in Malaysia:
A Panel Unit Root Test Analysis
-- Muzafar Shah Habibullah, A M Dayang-Affizzah
,
Kian-Ping Lim and Chin-Hong Puah
In Malaysia, the issue of economic convergence is much debated. Despite various Malaysia Development Plans for the past
three decades, regional disparity among states persists. Therefore, the objective of the present paper is to address the question whether
the state of Kedah has been converging, catching up or falling behind other states in Malaysia. The panel unit root test results,
obtained using the annual data for the period 1961-2003, suggest that the state of Kedah has been catching-up with other states. In this
respect, the local government has an important role to play in
enhancing the growth by continuously providing stable economic
environment for investment and other productive economic activities.
© 2009 IUP. All Rights Reserved.
An Empirical Study on Capital Structure
of SMEs in Punjab
-- Balram Dogra and Shaveta Gupta
Small and Medium Enterprise (SME) sector is a vital sector in the Indian context, as it contributes a big chunk to the national
income. This paper examines the sources of funds of SME sector operating in the state of Punjab. For this purpose, a survey of 50 SMEs
was conducted.
© 2009 IUP. All Rights Reserved.
|
