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Does monetary policy have differential state-level effects? an empirical evaluation

Author

Listed:
  • Nachane, D M
  • Ray, P
  • Ghosh, S

Abstract

The paper examines whether monetary policy has similar effects across major states in the Indian polity. Impulse response functions from an estimated Structural Vector Auto Regression (SVAR) reveal two sets of states: a core of states that respond to monetary policy in a significant fashion vis-à-vis others whose response is less significant. The paper attempts to trace the reasons for the differential response of these two sets of states in terms of financial deepening and differential industry mix.

Suggested Citation

  • Nachane, D M & Ray, P & Ghosh, S, 2001. "Does monetary policy have differential state-level effects? an empirical evaluation," MPRA Paper 2708, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:2708
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    File URL: https://mpra.ub.uni-muenchen.de/2708/1/MPRA_paper_2708.pdf
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    References listed on IDEAS

    as
    1. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    2. Rudi Dornbusch & Carlo Favero & Francesco Giavazzi, 1998. "Immediate challenges for the European Central Bank," Economic Policy, CEPR;CES;MSH, vol. 13(26), pages 15-64, April.
    3. Gerlach, Stefan & Smets, Frank, 1995. "The Monetary Transmission Mechanism: Evidence from the G-7 Countries," CEPR Discussion Papers 1219, C.E.P.R. Discussion Papers.
    4. Ramana Ramaswamy & Torsten M Sloek, 1997. "The Real Effects of Monetary Policy in the European Union; What Are the Differences?," IMF Working Papers 97/160, International Monetary Fund.
    5. Rudiger Dornbusch & Carlo A. Favero & Francesco Giavazzi, 1998. "The Immediate Challenges for the European Central Bank," NBER Working Papers 6369, National Bureau of Economic Research, Inc.
    6. Anil K. Kashyap & Jeremy C. Stein, 1997. "The role of banks in monetary policy: a survey with implications for the European Monetary Union," Economic Perspectives, Federal Reserve Bank of Chicago, issue Sep, pages 2-18.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Saibal Ghosh, 2012. "Determinants Of Banking Outreach: An Empirical Assessment Of Indian States," Journal of Developing Areas, Tennessee State University, College of Business, vol. 46(2), pages 269-295, July-Dece.
    2. Saibal Ghosh, 2009. "Industry Effects of Monetary Policy: Evidence from India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 44(1), pages 89-105, July.
    3. Ghosh, Saibal, 2009. "Does Financial Outreach Engender Economic Growth? Evidence from Indian States," MPRA Paper 32072, University Library of Munich, Germany.
    4. Agarwal, Manoj Kumar, 2005. "Budgetary constraints and growth scenario in Uttar Pradesh," Working Papers 05/30, National Institute of Public Finance and Policy.
    5. Santra, Swarup & Kumar, Rajesh & Bagaria, Nidhi, 2014. "Structural change of Bihar economy during 1999 to 2010: a district level analysis," MPRA Paper 53285, University Library of Munich, Germany.
    6. Ghosh, Saibal, 2007. "Economic Geography of Industrial Location: Evidence from Indian States," MPRA Paper 22441, University Library of Munich, Germany.

    More about this item

    Keywords

    monetary policy; regional effect; optimum currency area;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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