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Do Macroeconomic Conditions Matter For Agriculture? The Indian Experience

  • SHASHANKA BHIDE

    ()

    (National Council of Applied Economic Research, New Delhi, India)

  • B. P. VANI

    (Institute for Social and Economic Change, Bangalore, India)

  • MEENAKSHI RAJEEV

    ()

    (Institute for Social and Economic Change, Bangalore, India)

Macroeconomic instability, characterised by high inflation, fragile foreign exchange positions and high rates of interest, increases uncertainty and hence slows down economic growth. While this is generally accepted, the usual perception about the agricultural sector, particularly in India, is that it is immune to general macroeconomic shocks. In this paper, we examine this perception using a vector autoregressive model. The findings show that the agricultural sector is not insulated from macroeconomic shocks.

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Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal The Singapore Economic Review.

Volume (Year): 55 (2010)
Issue (Month): 04 ()
Pages: 647-670

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Handle: RePEc:wsi:serxxx:v:55:y:2010:i:04:p:647-670
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  1. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
  2. Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
  3. Rangarajan, C., 1982. "Agricultural growth and industrial performance in India:," Research reports 33, International Food Policy Research Institute (IFPRI).
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