Demand following and supply leading relationships: An empirical analysis for India
The study investigates the effects of activities of financial institutions (FIs). In particular, an econometric study has been undertaken to examine the ‘supply-leading’ and ‘demand-following’ characteristics of FI activities. The investigation is conducted by employing time series data using certain macro variables over the period 1962-63 to 1996-97. Our analysis shows the existence of a strong supply-leading (SL) relationship from real disbursements to real investments. The SL relation is further confirmed through the Sims causality tests. The demand-following (DF) relationship from real investments to real disbursements finds weak confirmation via the Sims causality test. Evidence therefore supports the presence of a strong SL link in the Indian context.
|Date of creation:||1998|
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Web page: http://mpra.ub.uni-muenchen.de
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- Wang, P. & Yip, C.K., 1991.
"Examining the Long-Run Effect of Money on Economic Growth,"
6-91-2, Pennsylvania State - Department of Economics.
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- Odedokun, M. O., 1996. "International evidence on the effects of directed credit programmes on efficiency of resource allocation in developing countries: The case of development bank lendings," Journal of Development Economics, Elsevier, vol. 48(2), pages 449-460, March.
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