Other financial institutions' portfolio behaviour and policy implications: A study of India
Applied literature has largely neglected the asset decision of other financial institutions (OFIs), though it may possess important policy implications. In this paper, portfolio behaviour of OFIs in India is modelled by using the annual flow of funds data for 1951/52 to 1993/94. The long-run model of the Almost Ideal Demand System and the allied concepts of cointegration generated economically and statistically plausible results. We find a strong influence of interest rates on portfolio behavior, thereby the role of interest rates on resource allocation. The paper concludes that the macroeconomic management through monetary policy actions may not be unnecessarily limited through the channel of OFIs in the post-financial reform regime in India.
Volume (Year): 19 (2005)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RIEJ20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RIEJ20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Sean Collins & Richard G. Anderson, 1997.
"Modeling U.S. households' demand for liquid wealth in an era of financial change,"
1997-014, Federal Reserve Bank of St. Louis.
- Collins, Sean & Anderson, Richard, 1998. "Modeling U.S. Households' Demands for Liquid Wealth in an Era of Financial Change," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(1), pages 83-101, February.
- Perron, Pierre, 1989.
"The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis,"
Econometric Society, vol. 57(6), pages 1361-1401, November.
- Perron, P, 1988. "The Great Crash, The Oil Price Shock And The Unit Root Hypothesis," Papers 338, Princeton, Department of Economics - Econometric Research Program.
- W. R. M. Perraudin, 1987. "Inflation and Portfolio Choice," IMF Staff Papers, Palgrave Macmillan, vol. 34(4), pages 739-759, December.
- Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
- Backus, David, et al, 1980.
"A Model of U.S. Financial and Nonfinancial Economic Behavior,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 12(2), pages 259-293, Special I.
- David Backus & William C. Brainard & Gary Smith & James Tobin, 1980. "A Model of U.S. Financial and Nonfinancial Economic Behavior," Cowles Foundation Discussion Papers 548, Cowles Foundation for Research in Economics, Yale University.
- Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107.
- William C. Brainard & James Tobin, 1968. "Pitfalls in Financial Model-Building," Cowles Foundation Discussion Papers 244, Cowles Foundation for Research in Economics, Yale University.
- Adam, Christopher S, 1999. "Asset Portfolios and Credit Rationing: Evidence from Kenya," Economica, London School of Economics and Political Science, vol. 66(261), pages 97-117, February.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
- Weale, Martin, 1986. "The Structure of Personal Sector Short-term Asset Holdings," The Manchester School of Economic & Social Studies, University of Manchester, vol. 54(2), pages 141-161, June.
- Hay, Donald A & Louri, Helen, 1989. "Firms as Portfolios: A Mean-Variance Analysis of Unquoted UK Companies," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 141-165, December.
- J.C. Taylor & K.W. Clements, 1983.
"A Simple Portfolio Allocation Model of Financial Wealth,"
Economics Discussion / Working Papers
83-14, The University of Western Australia, Department of Economics.
- Taylor, John C. & Clements, Kenneth W., 1983. "A simple portfolio allocation model of financial wealth," European Economic Review, Elsevier, vol. 23(2), pages 241-251.
- Barr, D G & Cuthbertson, Keith, 1991. "Neoclassical Consumer Demand Theory and the Demand for Money," Economic Journal, Royal Economic Society, vol. 101(407), pages 855-876, July.
When requesting a correction, please mention this item's handle: RePEc:taf:intecj:v:19:y:2005:i:4:p:543-562. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.