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A flow of funds model for India and its implications

Sen, Kunal and Roy, Tirthankar and Krishnan, R. (1996) A flow of funds model for India and its implications. Journal of Policy Modeling, 18 (5). pp. 469-494. ISSN 0161-8938

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Identification Number: 10.1016/0161-8938(95)00076-3

Abstract

The paper models household and commercial bank asset-choice for the Indian economy and integrates it with a simple two-sector formulation for the real sector. The dynamics of adjustment of household and commercial bank asset-choices is modeled using a “general disequilibrium” framework of the Brainard-Tobin type. The model is used to simulate policies that constitute India's ongoing stabilization and structural adjustment program. It is found that contractionary monetary policy has weak effects on output and prices, but deflationary fiscal policy has strong negative effects. Financial sector reform, on the other hand, has positive effects on investment and output.

Item Type: Article
Official URL: http://www.elsevier.com/wps/find/journaldescriptio...
Additional Information: © 1996 Society for Policy Modeling
Subjects: H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
Sets: Departments > Economic History
Collections > Economists Online
Date Deposited: 20 Apr 2010 14:17
Last Modified: 18 May 2011 10:00
URI: http://eprints.lse.ac.uk/id/eprint/27756

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