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No. 366

Jan 2012


ISSN 0019-5170


Is There any Link Between Commodity
Price and Monetary Policy?
Evidence from Australia

A. F. M. Kamrul Hassan


Ruhul A. Salim

The aim of this paper is to examine whether the commodity prices predict inflation, unemployment and short term interest rate in Australia. Advanced time series econometric modeling such as vector autoregressive model, cointegration and granger causality are used for this purpose. The empirical results show that three commodity prices (COMRL, COMNRL and COMBSMTL) precede inflation. However, no evidence of reverse causation is found. These findings have important implication for monetary authority. Inflation targeting experience has so far been hit by positive supply shocks. In case of negative supply shock, commodity price may be useful in singling out the likely direction of inflation.

1. School of Economics & Finance, Curtin Business School, Curtin University.
2. School of Economics & Finance, Curtin Business School (CBS),
    Curtin University, P. 0. Box U1987, Perth, WA 6845, Australia.

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An Empirical Analysis of the Impact of the
Economic Variables on the Stock Price
Index in India

Chhayakant Mishra

With the onset of liberalization in the early nineties, the decks had been cleared for the wholesale changes in the Indian macro-economic architecture. Different sectors have changed the way they operated and indeed in the way they put together. Among all the sectors, the most visible changes have come about in the financial sector and within it, the stock market has been the star performer. As a result, there can be little doubt about the growing importance of the stock market from the point of view of the aggregate economy. It has been observed that the Indian capital market has been evolved as a major source of raising resources for Indian corporate. Bombay Stock Exchange's (BSE) total market capitalization as a percentage of India's GDP has increased from four percent in 1978-79 to around 28 percentage in 2004-05. Indian stock market also drawn the attention of the Global investors and the dominance of Foreign Institutional Investors (FII) has been quiet persistent in the 1990s.

Not only has the stock market has increased relative to the real economy, but also it appears that the inter-relationship between them has strengthened. Earlier it was a concept worldwide that stock market reflects to some extent the goings on in the rest of the economy.

Administrative Officer, Academic Affair, Vice-Chancellor's Secretariat,
Block No. 33, Lovely Professional University, Phagwara, Punjab-144402

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GARCH based ARIMA Forecast for Indian
Rupee/US Dollar Exchange Rate

Kanchan Datta


Chandan Kumar Mukhopadhayay


In the era of globalization the perfection in exchange rate forecasting are very essential for hedging decisions. Above all the important phenomenon is the depreciating tendency of US dollar and abnormal oil price and food price hike worldwide. An attempt has been made in this paper to estimate the parameters of ARIMA and GARCH and apply them to simulate and predict the rupee / us dollar exchange rates.

Autoregressive Integrated Moving Average (ARIMA) was introduced by Box and Jenkins in 1960s for forecasting a variable. The emphasis of these methods is not on constructing single equation or simultaneous-equation models but on analyzing the probabilistic or stochastic properties of economic time series on their own under the philosophy of letting the data speak for themselves. In the estimation of any ARIMA model the variance of the disturbance term is assumed to be Homoscedastic. But in some cases variance of the error term is no a function of an independent variable but instead varies over time in a way that depends on how large the errors were in the   Past.


1.Reader, Department of Economics, University of North Bengal, Darjeeling.
2.Professor, Department of Economics, University of North Bengal, Darjeeling.

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Determinants of Financial
Leverage in Indian
Pharmaceutical Industry

Franklin John, S.


Muthusamy, K.

This paper attempts to explain the variables that influence the use of debt funds in the Indian Pharmaceutical industry .The results are broadly consistent with the previous research findings. Variables like interest; asset structure, retained earnings and intrinsic value of share are positively associated with leverage while cash flow and interest coverage bear negative association with leverage. Indian pharmaceutical Companies employ substantial amount of debt as is evident from debt-equity ratio as well as total debt to total assets ratio. The Indian pharmaceutical industry is growing at an annual growth rate of 20 per cent is evolving as one of the major industries in the world with its huge market and a great availability of skilled labour and improved laboratories.


1.Reader, Department of Economics, University of North Bengal, Darjeeling.
2.Professor, Department of Economics, University of North Bengal, Darjeeling.

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Impact of Exchange Rate
Depreciation on Domestic
Output in Pakistan


Muhammad Afzal


Bashir Ahmad Khilji


There is disagreement on the desirability of devaluation in the LDCs. Since the de-linking from USA dollar in January 1982, the Pakistan rupee has been losing its value vis-a-vis US dollar and other important currencies. The purpose of the paper was to see the response of domestic output to fiscal and monetary policies besides exchange rate and terms-of-trade. These policies have stable and long-run relationship with the domestic output However, the impact of money supply and exchange rate is more robust than the other variables. Easy monetary policy has a favorable impact on domestic output Fiscal discipline is the need of the hour because persistent and large budget deficit breeds inflation.

Domestic output responds to a number of factors. The importance and relevance of these factors may differ from country to country and may also change overtime. An important macroeconomic policy to reduce the


1. Professor, Department of Management Sciences, COMSATS Institute of Information     Technology, Islamabad - Pakistan.
2. Professor, Department of Economics, National University of Modern Languages &
    Sciences, Islamabad - Pakistan.

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Inward Investment and Market
Structure in an Open Developing
Economy: A Case of India's
Manufacturing Sector


Jatinder Singh


Vlnoj Abraham


The objective of this paper is to analyze the impact of Foreign Direct Investment (FDI) on market concentration with special reference to India's manufacturing sector during the post-reform period. The study, using firm level data and panel regression techniques has shown that FDI does encourage market concentration. If the result of the study is any indication, the increased inflow of FDI is likely to make India's manufacturing sector more concentrated and calls for policy makers to mitigate Undesirable outcomes of FDI.

The issue of industrial concentration have attracted the attention of many academicians and policy makers since long (Ghosh, 1975; Curry and George, 1983; Kambhampati, 1996) mainly owing to the economic inefficiencies and negative welfare implications attached to it. A renewed


1.Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi
2.Professor, Centre for Development Studies, Thiruvananthapuram, Kerala (INDIA)
3.Assistant Professor, Centre for Development Studies, Thiruvananthapuram, Kerala

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Higher Education in India in context of
Equity and Sustainable Development:
Special Reference to SC and ST


Rashmi Joshi


Gautam Sinha


Higher Education is an effective instrument for social and economic development and national integration because it contributes not only human resources efficiency as well as it's directly correlated to Social Inclusion/Sustainable Development and the growth of national income. Current international and national societal life of vulnerable groups (SC/ST); it also creates equity development and secure sustainable future.

India is a seat of Higher Learning from the ancient time. In the past sixty years there has been steadily progress in achieving social economic development in India, but inequality in education (special in higher education) in context of SC and ST not only persist but are expending in many parts in India.

The objective of this paper: To examines that can education provide a platform for equity and sustainable development in context of disadvantage group of society (SC, ST) and highlight there problem in Higher education.


1.Research Scholar, Department of Economics, FSS, BHU
2.Research Scholar, Department of Economics, FSS, BHU

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Real Exchange Rate Misalignment and
Economic Growth: An Empirical
Study for the Maghreb Countries


Zouheir ABIDA


It has long been recognized in academic and policy debates that domestic policies play an important role in explaining economic growth. The paper investigates the role of real exchange rate (RER) misalignment on long-run growth in three countries of the Maghreb countries (Tunisia, Algeria and Morocco) over the period 1980-2008. We first estimate equilibrium RER relying on the Fundamental Equilibrium Exchange Rate (FEER) approach, from which misalignment is derived. Second, we estimate a dynamic panel growth model in which among the traditional determinants of growth, our measure of misalignment is included. The results indicate that the coefficient for RER misalignment is negative, which means that a more depreciated (appreciated) RER helps (harms) long-run growth. As a consequence, an appropriate exchange rate policy would close the gap between RER and its equilibrium level.

The assessment of equilibrium values of the real exchange rate (RER) has always been an important issue in international macroeconomics, especially in the current context of global imbalances. Indeed, since the mid
development in context of disadvantage group of society (SC, ST) and highlight there problem in Higher education.


Department of Economics, University of Sfax, Faculty of Economics and Management of
Sfax, BP 1088, Sfax -Tunisia

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The Gender and Financing
Dimensions of Higher Education
in Africa: A case study in the
Zambian context


Venkatesh Seshamani


Sylvia Mwamba Shalumba


In many universities and institutions of higher learning in Africa, gender disparities exist not only in terms of admissions of students and recruitment of academic and senior, administrative staff, but also in respect of opportunities and prospects for career advancement of female staff. As an illustration of the latter, few women get to occupy higher administrative positions such as Vice Chancellor and Deputy Vice Chancellor or attain higher academic ranks of professorship. A number of factors are responsible for such a chronic, and what seems often to be an intractable, situation. Long-entrenched cultural beliefs and practices accompanied by a pronounced lack of pro-active and affirmative actions for the promotion of women's intellectual and skills development account for the gender-skewed situation that obtains in many universities. These factors in turn are reflected in the allocation of investments and expenditures that are predominantly biased in favor of males.


1. Professor. Department of Economics. University of Zambia ,Box 32379, Lusaka, Zambia

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Government Domestic Debt
Portfolio in Nigeria: A
Market Risk Analysis


Robert C. Asogwa


The growth and changing structure of government domestic debt in Nigeria in recent times have raised serious concerns about its sustainability and risk. While large literature exist which address issues and consequences relating to external debt in Nigeria, only very few focus on domestic debt despite these concerns. This paper analyses the structural characteristics and market risk profile of domestic debt in Nigeria. Specifically, it computes the Value at Risk (VaR) of a component of domestic debt (treasury bills) which is important for monetary policy conduct While the composition and maturity structure of the domestic debt have been improving in recent times since the introduction of the new Federal Government of Nigeria (FGN) Bonds, the market risk has been high, arising partly because of the volatility in interest rates. These rising risk levels have important implications for the conduct of monetary policy especially at the Open Market Operations.


1.Economic Governance Unit, United Nations Development Programme (UNDP),
   UN HOUSE,Plot 617/618, Diplomatic Zone, Central Area District, P.M.B 2851, Garki
   Abuja, Nigeria.

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