|
on Central and Western Asia |
| By: | Rongili Biswas |
| Abstract: | The paper attempts to construct political influence variables and explain discrepancies in fund disbursement through proper econometric specification in the Indian context. |
| Keywords: | political, fund, discretionary, fiscal, federalism, central, state, centre, disbursement, econometric, Indian, economists, politics, finance, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:1842&r=cwa |
| By: | Eswar S. Prasad |
| Abstract: | In this paper, I analyze India's approach to capital account liberalization through the lens of the new literature on financial globalization. India's authorities have taken a cautious and calibrated path to capital account opening, which has served the economy well in terms of reducing its vulnerability to crises. By now, the capital account has become quite open and reversing this is not a viable option. Moreover, the remaining capital controls are rapidly becoming ineffective, making the debate about capital controls rather moot. Managing de facto financial integration into international capital markets and aligning domestic macroeconomic policies in a manner that maximizes the indirect benefits and reduces the risks is the key challenge now facing India's policymakers on this front. |
| JEL: | F3 F4 O2 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14658&r=cwa |
| By: | Schou-Zibell, Lotte (Asian Development Bank); Wells, Stephen (ICMA Centre, University of Reading) |
| Abstract: | While India boasts a world-class equity market and increasingly important bank assets, its bond market has not kept up. The government bond market remains illiquid. The corporate bond market, in addition, remains restrictive to participants and largely arbitrage-driven. Securitization, which once had the jump on other Asian markets, has failed to take off. To meet the needs of its firms and investors, the bond market must therefore evolve. This will mean creating new market sectors such as exchange-traded interest rate and foreign exchange derivatives contracts. It will mean relaxing exchange restrictions, easing investment mandates on contractual savings institutions, reforming the stamp duty tax, and revamping disclosure requirements for corporate public offers. This paper reviews the development and outlook of the Indian bond market. It looks at the market participants-including life insurance, pension funds, mutual funds and foreign investors-and it discusses the importance to development of learning from the innovations and experiences of others. |
| Keywords: | India; emerging East Asia; bond market; securitization; collateralized borrowing and lending obligations (CBLO) |
| JEL: | F34 G28 K22 O53 |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0022&r=cwa |
| By: | Das, Rituparna |
| Abstract: | Market Risk Management Process in India is in an evolving process since the Banks in India are still in an early stage of development in the sense that they are lacking statistical database, equipped MIS and adequate supply of trained personnel. Many a good number of banks are suffering from breaches of VaR calculated following internal models. Further they are also finding difficulty in validation with small sizes of sample. Firstly in India the maximum traded security during the first quarter of 2008-09 is the 10 year benchmark G-Sec but the return figures on a security of 10 year maturity are not available since the particular benchmark security has no more a maturity of 10 years after a single day elapsed. The security market is very thin with unutilized arbitrage opportunities and absence of pricing of the characters like convexity. Secondly liquidity in Indian money and G-Sec markets is not sufficient to induce active trading in all instruments of all maturities such as to get an idea of yield movement in every maturity. Thirdly using discreet compounding and discounting is not appropriate in valuation. Fourthly asset returns in reality follow other distributions like beta and log-logistics where the simple and probability weighted measures of average and standard deviation are different and hence 99% VaR estimate is well above the estimate based on the assumption of Normal Distribution. Finally it is not mandatory in India to compute VaR but Duration does not provide risk measurement across the categories of assets and, hence, aggregation of risk for the entire trading book. |
| Keywords: | Value at Risk; Fixed Income; G-Sec; Modified Duration; Capital Charge; Vertical Disallowance; Horizontal Disallowance; Portfolio; Zero Coupon; Term Structure; Yield Curve; YTM; Nelson-Siegel; CCIL; RBI |
| JEL: | D81 |
| Date: | 2009–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12997&r=cwa |
| By: | Arvind Virmani |
| Abstract: | The paper proposes a Public accountability information system (PAIS), with a web enabled public information system and a smart card recording all the benefits that the poor are entitled to receive through government programs. [Planning Commission WP 1/2007]. |
| Keywords: | public accountability, information system, poor, benefits, government, India, smart card, media, state GDP |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:1845&r=cwa |
| By: | Khan, Safdar Ullah; Saqib, Omar Farooq |
| Abstract: | This study investigates the effects of political instability on inflation in Pakistan. Applying the Generalized Method of Moments and using data from 1951-2007, we examine this link in two different models. The results of the ‘monetary’ model suggest that the effects of monetary determinants are rather marginal and that they depend upon the political environment of Pakistan. The ‘nonmonetary’ model’s findings explicitly establish a positive association between measures of political instability and inflation. This is further confirmed on analyses based on interactive dummies that reveal political instability significantly leading to high (above average) inflation. |
| Keywords: | political instability; inflation; Pakistan |
| JEL: | E31 E63 |
| Date: | 2008–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13056&r=cwa |
| By: | Haider, Adnan; Khan, Safdar Ullah |
| Abstract: | This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for Pakistan using Bayesian simulation approach. Model setup is based on new Keynesian framework, characterized by nominal rigidity in prices with habit formation in household’s consumption. The core objective is to study whether an estimated small open economy DSGE model provides a realistic behavior about the structure Pakistan economy with fully articulated description of the monetary policy transmission mechanism vis-à-vis domestic firm’s price setting behavior. To do so, we analyze the impulse responses of key macro variables; domestic inflation, imported inflation, output, consumption, interest rate, exchange rate, term of trade to different structural/exogenous shocks. From several interesting results, few are; (a) high inflation in Pakistan do not hit domestic consumption significantly; (b) Central bank of Pakistan responds to high inflation by increasing the policy rate by 100 to 200 bps; (c) exchange rate appreciates in both the cases of high domestic and imported inflation; (d) tight monetary policy stance helps to curb domestic inflation as well as imported inflation but appreciates exchange rate significantly (f) pass through of exchange rate to domestic inflation is very low; finally parameter value of domestic price stickiness shows that around 24 percent domestic firms do not re-optimize their prices which implies averaged price contract is about two quarters. |
| Keywords: | New-Keynesian economics; open economy DSGE models; nominal rigidities; monetary policy transmission mechanism; Bayesian Approach |
| JEL: | F37 E32 E52 F47 E47 |
| Date: | 2008–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12977&r=cwa |
| By: | Ahmed Alouani (Universit 0064e Nice-Sophia Antipolis, CEMAFI, France) |
| Abstract: | The financial reform is one of the most important reforms prescribed by the Washington Consensus. With its internal and external components, it occurs in the final stages of the process of economic liberalization. In this work, and after listing, briefly, the causes of financial liberalization, we are going to study in a second section financial development and bank performance in four countries of the MENA region: Tunisia, Algeria, Morocco and Egypt. In this context, we will explore some criteria for determining if the banking sector is performing as the level of intermediation margins, the state of the banking service, and so on. The third section will be subject to an assessment of financial liberalization since the start of reforms to the present day, while focusing on the impact of liberalization on the investment, savings, capital entry, and so on. Our conclusion will be in the form of recommendations aimed at showing that overall reforms, significant progress have been made in recent years but much remains to be done. |
| Keywords: | Financial reforms, Causes, Banking performance, MENA, Liberalization effects |
| JEL: | G28 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:voj:wpaper:200836&r=cwa |