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ID: 142017

Fiscal multipliers for India / Bose, Sukanya ; Bhanumurthy, N R

Bhanumurthy, N R	Article
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Summary/Abstract

This article attempts to present a framework for the estimation of fiscal multipliers for the Indian economy in the structural macroeconomic modelling tradition. Empirical estimates of short-run multipliers are obtained by giving shocks to a range of fiscal instruments—expenditures and taxes. As per our estimates, the values of the capital expenditure multiplier, transfer payments multiplier and other revenue expenditure multiplier are 2.45, 0.98 and 0.99, respectively, while the tax multipliers are around −1. Expenditure multipliers were also obtained in the presence of fiscal consolidation targets. These estimates again point to the strong multiplier effect of capital expenditure on output, and underscore the need to prioritise capital expenditure.

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India ; Fiscal Multiplier ; Structural Modelling

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ID: 134741

Modelling India’s external sector: review and some empirics / Bhanumurthy, N.R; Bose, Sukanya ; Panda, Swayamsiddha

Bhanumurthy, N.R	Article
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In the aftermath of the global food and fuel price spikes, and the recent global financial crisis, understanding of external sector behaviour has become crucial. The transmission mechanism of external sector shocks to domestic macroeconomic variables is essential for undertaking relevant policies to mitigate the adverse impact of such shocks. Here an attempt has been made to review the theoretical and empirical issues relating to India’s external sector behaviour and to present a suitable analytical framework for macro modelling.

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