ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Hiranya MukhopadhyaySubscribe to Hiranya Mukhopadhyay

Food Price Escalation in South Asia

South Asia is the region most vulnerable to increasing food inflation given that a large part of its population lives below or near the poverty line. An empirical analysis of the factors that could explain the increase in food inflation is presented in this paper, while the effect of food price inflation on poverty and macroeconomic stability in south Asia is considered. Along with proposing some practical policies to address the situation, regional cooperation is identified as a factor that has the potential to provide an effective solution.

Horizontal Imbalances in India

Horizontal imbalances (measured by the coefficient of variation in own revenue as a percentage of total expenditure) persist in India even today mainly due to a host of economic and political factors. Variations in tax base, tax effort, infrastructural facilities - both physical and social - and political uncertainty are found to be the important determinants of horizontal imbalances. The dispersion in horizontal imbalance can only be reduced through all-round development of the poorer states. General-purpose transfers from the centre are essential for horizontal equity but they cannot ensure a permanent solution.

RBI's Intervention in Foreign Exchange Market

In the aftermath of the currency crises around the world, the role of the central banks' interventions in the foreign exchange market has gained in importance. It is obvious that such intervention affects the exchange rate in two ways, first, by affecting the extent of excess demand in the foreign exchange market, and thereafter through a complex interplay of the macroeconomic variables. The stylised literature has addressed this issue by estimating the so-called offset coefficients, a method that is ad hoc and that is marked by the conspicuous absence of an underlying macro-model. In this paper, we build on the stylised Mundell-Fleming model, and derive an estimable reduced form expression that allows us to link exchange rate movements with the RBI's interventions. The model itself, and the subsequent empirical result indicate that the effect of RBI's intervention in the foreign exchange market is at best unclear. Specifically, given the time span of the data, the RBI's interventions in the market seem to have been ineffective.

Economic Liberalisation of the 1990s-Stabilisation and Structural Aspects and Sustainability of Results

This paper, first, traces the main components of the economic reform process in India of the early 1990s, both in its stabilisation and structural aspects; second, points to the inadequacy and the non-sustainability of the measures that were undertaken; and third, by way of proposing some explanations based on political economy aspects, provides ground for the overall direction in which India needs to move to revitalise its reform process and to sustain it.

Has Credit Crunch Led to Industrial Stagnation-A Disequilibrium Approach

A Disequilibrium Approach Sumon K Bhaumik Hiranya Mukhopadhyay Industry has contended that the slow down in industrial growth is a consequence of a (supply side) credit crunch. The government and the Reserve Bank of India have, in turn, responded with an expansionary credit policy led by significant reductions in the CRR.

Restructuring the Tax System

Restructuring the Tax System Hiranya Mukhopadhyay IN a recent paper K Sundaram, V Pandit and B Mukherji (henceforth KVB) argued that cascading type tax (CAT) is better than VAT (or rather, rebate-adjusted tax system, RAT) because it can generate same revenue (sector by sector) and replicate VAT prices with lower ad valorem duty rates, thus providing' lower incen-tives for tax evasion.1 It is worth mentioning that whenever pricing is done on the basis of total cost (including input duty) and then allow for set-off for input duty, revenue neutrality will not make any difference between the pre-VAT and post-VAT prices. Prices will be identical. That is precisely the reason for the result cited in their paper. The price equation in their paper with the multiplicative mark-up is.

Devaluation, Liberalisation and Structural Linkages between India s Foreign Trade and National Income

Linkages between India's Foreign Trade and National Income Sunanda Sen Hiranya Mukhopadhyay The structural links between a developing country's foreign trade sector and its domestic economy have a crucial bearing on the results likely to be achieved by trade liberalisation and currency devaluation. These links are often overlooked.

Transition from Stabilisation to Growth

Hiranya Mukhopadhyay Economic Stabilisation and Debt in Developing Countries by Richard N Cooper; The MIT Press, Cambridge, Massachusetts, 1992.

Protection, Growth and Competitiveness-Study of Indian Capital Goods Industry

Study of Indian Capital Goods Industry THE Nehru-Mahalanobis strategy of state- dominated industrialisation within high protective barriers, which India has implemented for over 40 years, has come under increasing criticism in recent years. One view is that the strategy was simply a mistake- that it has blocked rapid, efficient, industrialisation, thereby leaving India behind in the race to achieve higher standards of living in the developing countries. An alternative view recognises the achievements of this strategy, especially compared to conditions prevailing during the colonial period, but maintains that the strategy has outlived its usefulness and should now be replaced by a more market-oriented, open economy approach for the next phase of development. The rationale for much of the ongoing policy reform in India is provided by these views. Their analytical underpinning is provided by traditional trade theory which demonstrated that under certain conditions 'free trade' is the best policy for all countries. Indeed, this has been perhaps the single-most influential and enduring theorem of economics since the time of Ricardo. Recently a significant literature has emerged which even attempts to measure the costs of protection [Corden, 1985]. Second best variants of this theory recognised a positive role for protective tariffs, etc, as devices necessary to support second best results when the best outcomes were preempted by domestic distortions. Though learning effects and increasing return were recognised as a possible justification for protecting infant industries, as advocated originally by Fredrich list, they remained outside the cropus of formal theory.

India s Petroleum Imports-An Econometric Analysis

India's Petroleum Imports An Econometric Analysis Bishwanath Goldar Hiranya Mukhopadhyay The paper presents an econometric analysis of India's petroleum imports. For this purpose, demand functions have been estimated for various petroleum products, and an import function has been estimated for petroleum. The results of the analysis indicate that the gap between domestic demand for petroleum products and domestic production of crude oil is the main determinant of petroleum imports. International price of petroleum and the foreign exchange availability also exert some influence on the government's decision to import petroleum. An important finding of the study is that both domestic demand for petroleum products and import demand for petroleum are not much responsive to price changes.

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