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Nexus between Fiscal Deficits, Money Supply and Price Level in India: A VAR Approach


  • Purna chandra Parida

    (Institute for social and Economic Change)

  • Hrushikesh Mallick
  • Maathai K Mathiyazhagan


This paper examines the dynamic relationship between fiscal deficits, money supply, and price level in India during the period 1960-61 to 1999-2000. Using vector autoregression (VAR) econometric methodology, which allows variables to be treated as potentially endogenous, the study finds that fiscal deficits and money supply are both influenced by each other. Further, it reveals that the price level does not influence either the fiscal deficit or money supply but rather is being influenced by both the variables.

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  • Purna chandra Parida & Hrushikesh Mallick & Maathai K Mathiyazhagan, 2002. "Nexus between Fiscal Deficits, Money Supply and Price Level in India: A VAR Approach," Working Papers 104, Institute for Social and Economic Change, Bangalore.
  • Handle: RePEc:sch:wpaper:104

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    References listed on IDEAS

    1. Bartone, Carl & Bernstein, Janis & Wright, Frederick, 1990. "Investments in solid waste management : opportunities for environmental improvement," Policy Research Working Paper Series 405, The World Bank.
    2. Evans, Peter, 1996. "Government action, social capital and development: Reviewing the evidence on synergy," World Development, Elsevier, vol. 24(6), pages 1119-1132, June.
    3. Madhushree Sekher, 2000. "Local Organisations and Participatiory CPR Management: Some Reflections," Working Papers 61, Institute for Social and Economic Change, Bangalore.
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    Fiscal Deficit; Money Supply; Price Level;


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