Jul'19


The IUP Journal of Applied Economics

ISSN: 0972-6861

A ‘peer reviewed’ journal indexed on Cabell’s Directory, and also distributed by EBSCO and Proquest Database

It is a quarterly journal that analyzes the issues of Micro, Macro, Development and Energy economics. It provides papers on Industrial economics, Public finance, Industry, Agricultural, Rural economics, etc.

Privileged access to Online edition for Subscribers.

Focus Areas
  • Microeconomics
  • Macroeconomics
  • Industrial Economics
  • Public Finance
  • International Trade and Business
  • Financial Economics
  • International Finance
  • Energy Economics
  • Environmental Economics
  • Labor Economics
  • Development Economics
  • Agriculture and Rural Economics
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Article   Price (₹) Buy
Does Government Deficit Crowd Out Private Investment? An Empirical Analysis for National and Sub-National Governments
50
Monetary Policy Transmission in India: Interest Rate Puzzle
50
Optimal Resource Allocation for SQM: A Comparative Case Study in Pharmaceutical Industry
50
Assessing the Determinants of FDI in Emerging Markets: Do Natural Resources and Institutions Matter?
50
IUPJAE Interview
An Interview with Professor K L Krishna
50
     
Contents : (Jul 2019)

Does Government Deficit Crowd Out Private Investment? An Empirical Analysis for National and Sub-National Governments
Pushpa Trivedi, Sangita Misra, Kaushiki Singh and Lavanya Ammu

Expansionary fiscal policy can stimulate or retard growth in an economy depending on whether it crowds in or crowds out private investment. Amidst mixed results in the literature, the present study makes a comprehensive attempt to examine crowding out evidence by exploring the link between Gross Fiscal Deficit (GFD) on the one hand, and real interest rates and private investment, on the other, in a time series framework for the central government and panel framework for 23 state governments. The Autoregressive Distributed Lag (ARDL) cointegration results confirm the existence of a long-run equilibrium relationship between GFD, adjusted for cycles, and real rate of interest for central government for the period 1980-81 to 2017- 18, thus supporting financial crowding out. While support for real crowding out is weak for central government, for the state governments, support has been found for real crowding out, with the strength of the coefficient rising when GFD is financed by gross market borrowings. This reinforces the need for both tiers of government—national and sub-national—to continue efforts towards fiscal consolidation, improving the quality of expenditure and to try financing their deficits less via market borrowings and more through own revenues.


© 2019 IUP. All Rights Reserved.

Article Price : ₹ 50

Monetary Policy Transmission in India: Interest Rate Puzzle
Kajleen Kaur and Ananya Ghosh Dastidar

The interest rate transmission mechanism of monetary policy to real economic activity has been the center of interest of many researchers globally. The aim of this paper is to study the impact of the policy interest rate (both nominal and real interest rates) on the output gap in India for the period from May 2001 to March 2015 using monthly data, and explore whether the Reserve Bank’s switching to inflation targeting has hampered the growth objective. The paper uses Autoregressive Distributed Lag (ARDL) cointegration approach to study the long-run and shortrun dynamics of the objective variables. It takes sufficient number of lags to handle the problem of endogeneity mostly present amongst macroeconomic variables. The study finds presence of interest rate puzzle, where the conventional negative relationship between output and interest rate is broken. It suggests the presence of some other factors such as business mood, investment uncertainty, presence of parallel economy or the time period which was dominated by global financial crisis and its aftermath as the possible reasons for the decline in growth rate.


© 2019 IUP. All Rights Reserved.

Article Price : ₹ 50

Optimal Resource Allocation for SQM: A Comparative Case Study in Pharmaceutical Industry
Sanjay Kaushik and Harjit Kaur

The allocation of scarce resources forms the core of modern economies, but the focus of strategic management literature is more on a narrower challenge of appropriate allocation of resources for corporate strategy. The ‘soft’ element and ‘hard’ element of total quality management may be classified into three types of resources, namely, Human Resources (HR), Organizational Resources (OR), and Technological Resources (TR). The objective of the current paper is to optimally allocate the three resources for implementing the selected 10 quality strategies of Strategic Quality Management (SQM). A case study approach is used here based on the premise that resource allocation activity is unique to every organization. A combined Analytic Network Process (ANP)-Goal Programming (GP) operations research technique is used for optimal allocation of resources. Here, the gap between desired and actual resource allocation is assessed using ANP technique and GP is used for optimal allocation of resources. Both the techniques are operation research techniques and do not require a large sample size. The data is collected using Saaty’s (1999) 9-point paired comparison scale from respondents (three respondents per company) employed in two pharmaceutical companies. The results of ANP concluded that some of the quality strategies were over-resourced, while others were under-resourced in both the companies. The output of ANP was used as an input for GP and the results propose an optimal reallocation of three resources for the selected quality strategies of SQM.


© 2019 IUP. All Rights Reserved.

Article Price : ₹ 50

Assessing the Determinants of FDI in Emerging Markets: Do Natural Resources and Institutions Matter?
Anup M Nandialath and Tim Rogmans

The role of Foreign Direct Investment (FDI) in economic development is a well-researched phenomenon. However, extant research has failed to arrive at a consensus on the key drivers of FDI, and the literature is particularly eclectic on the role of natural resources and institutions and how they influence FDI. The present paper argues that this lack of consensus is due to model uncertainty. Drawing on more recent literature on model uncertainty and the determinants of FDI, the paper uses a Bayesian Model Averaging (BMA) approach to find that neither natural resources (oil and gas) nor institutional quality is a robust predictor of FDI flows into 16 countries in the Middle East North Africa (MENA) region. The analysis shows that FDI flows are determined by per capita GDP and oil prices. Given the complexity and volatility of the international business environment, it is more important than ever that economic policy decisions are based on robust models that take into account model uncertainty.


© 2019 IUP. All Rights Reserved.

Article Price : ₹ 50

IUPJAE Interview
An Interview with Professor K L Krishna
An Interview with Professor K L Krishna

Over the last six decades, Professor Kosaraju Leela Krishna, popularly known as “KL” or “KLK” among his fraternity, ardently pursued his teaching and research interests in the fields of Applied Econometrics, Industrial Economics, Economics of Productivity and Regional Inequality and Empirics of Trade and wrote research papers on a variety of themes. He has been leading the India KLEMS Productivity Project, as a part of the World KLEMS Initiative since 2009. He has edited/co-edited five books, of which Econometric Applications in India (1997) is still used by all those econometricians engaged in model building to study the major fields of economics.


© 2019 IUP. All Rights Reserved.

Article Price : ₹ 50

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