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Governance of Fiscal Deficit in India

Author

Listed:
  • Das, Rituparna

Abstract

Indian legal frame compels the central bank of the country to increase money supply through financing fiscal deficits and thus fuels inflation, but, the liberalization of the economy has neutralized such inflationary potential. This chapter shows that the influence of such deficit financing on money stock became virtually nil during the post reform period, rather foreign exchange assets emerged as a powerful determinant of money stock.

Suggested Citation

  • Das, Rituparna, 2006. "Governance of Fiscal Deficit in India," MPRA Paper 65160, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65160
    as

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    File URL: https://mpra.ub.uni-muenchen.de/65160/1/MPRA_paper_65160.pdf
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    References listed on IDEAS

    as
    1. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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