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No. 365

October 2011


ISSN 0019-5170


Terms of Trade and Non-Traded Goods; A Theoretical Analysis

Arabinda Ghosh1 and Kausik Gupta2

A three good two-factor model has been developed to study the behaviour of terms of trade in the presence of no-ntraded goods. Non-traded market plays a key role in influencing the equilibrium value of the terms of trade for die home country. Home country's terms of trade improve when demand for no-ntradeables and stock of capital increase during growth process in the developing economies. When non-tradeables are present any investigations on die impact upon terms of trade no longer require trade balance condition.

  1. Principal, Udaynarayanpur Madhabilata Mahavidyalaya, Udaynarayanpur-711226, Howrah, W.B.

  2. Department of Economics Rabindra Bharati University, Kolkata

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Ecosystem Services; Valuation of Common Property Resources in Tamil Nadu, India

A. Kannan1 and M. Ravichandran2

Common property resources play an important role to the rural poor in particular and local population in general. Over the periods the availability of CPRs has been declining trend of both quality and quantity. Even though, income and employment activities and its important contributions to the rural people's livelihoods are critical. In this way an investigation carried out two villages comparatively with two different agro-climatic conditions. Objective is that to discern the extent of contribution for generating employment and income of poor people by common property resource management The research study found that the rural rich receive higher income from CPR land cultivation than the rural poor and it has also varied from wet to dry land.

  1. Assistant Professor, Department of Environmental Economics, School of Economics, Madurai Kamaraj University, Madurai-625 021, Tamil Nadu, India.

  2. Professor & Head, Department of Environmental Management, Bharathidasan University, Tiruchirappalli - 620 024, Tamil Nadu, India.

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A Review of State Finances in Haryana

Miss. Manju Dalai *

In this paper an attempt has been made to examine the finances of Haryana state which is know for its sound finances and prosperity among all other states of India. The study found that state reduced or converted its revenue and fiscal deficits in surpluses by reducing its expenditure inspite of increasing revenue receipts. Inspite of revenue and fiscal surpluses, state could not control its expenditure on interest payment due to high level of debt stock, large gap between interest rates paid and received by the state government low rate of return on investment in public sector undertakings and compulsion borrowings from NSSF. State used its 95 percent subsidies for power sector only and 74 percent of revenue receipts and 71 percent of revenue expenditure for the committed expenditure only. So there is need of reforms at major level to make the finances of the Haryana state government sound in real sense. State needs to control its expenditure on interest payments, on committed nature items and should increase expenditure on social and economic services so that repayment capacity as well welfare of the economy may increase.

* Lecturer in Economic, B.P.S.M. Girls College, B. P. S. Mahila Vishwavidalaya Khanpur
Kalan, Sonipat (Haryana).

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Global Turbulence, Emerging Markets and Structural Adjustment: A Co-Integration Analysis

U. Kalpagam2

Since September 2008, financial markets around the world have experienced unprecedented turbulence leading to a downward spiral in stock indices as the global economy began to be gripped by recession, caused primarily by what is identified as the sub-prime crisis in the United States. This paper will analyze die extent and nature of turbulence in developed and emerging financial markets for the last three quarters from July 2008 -March 2009. The objective of the analysis is to examine the extent to which emerging markets moved in tandem with developed markets and to examine the extent of co-integration between developed and emerging markets. The paper will highlight the causes for differential performance of markets, if statistical results indicate so, in terms of the different structural conditions of both sets, of market and their relation to the economic fundamentals as also the differences in regulatory frameworks. The analysis pertains to three developed markets including United States, United Kingdom and Japan and three emerging markets namely India, Brazil and Taiwan.

  1. Lecturer, Economics, Jamia Millia Islamia, New Delhi.

  2. Professor, G. B. Pant Social Science Institute, Allahabad.

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Key Indicators of Economic Development in Pakistan and India: A Comparative Study

Khair-uz-Zaman1, Ghulam Farid2
Qaiser Aman 3

This paper empirically investigates the impact of some key indicators on economic development of Pakistan and India using time series data for the period from 1970 to 2006. To check the stationarity in the level of data, we applied Augmented Dickey Fuller Test In this study we have taken Per Capita Income as a dependent variable while Export, Import, GNP, Foreign Direct Investment Population and Economic Growth Rate are the explanatory variables in both cases. By using the regression model in log-linear form we obtained. Export (.07726), Import (.27490), Inflation (-.068998), Foreign Direct Investment (.050928), Population (2.4625), GNP (.03913) and Growth Rate (.03913) significant results with expected signs in case of Pakistan. While in case of India significant variables are Export (.45481), Foreign Direct Investment (.11393), GNP (.069484) and Growth Rate (0.18649) with positive sign. In the light of this empirical analysis of data and research findings it is imperative for Pakistan to concentrate more on exports, attract FDI, maintain sustaining EGR and craft well defined policy for human development and reduce inflation for economics development. This study shows that export, FDI, GNP and EGR significantly contribute the economic development of India.

  1. Economics Dept, Gomal University, D. I. Khan. E-mail:
  2. Professor, Qurtuba University, D. I. Khan.
  3. Lecturer, Mgt Sciences, Qurtuba University, D. I. Khan. E-mail:

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FBI in Retail Trade

T. V. S. Ramamohan Rao 1

This study considers three types of retail outlets: street corner stores (SCS), domestically financed mega marts (DMM), and retail FDI (FDI). Three distinguishing features of such retail outlets have been identified: organizational capabilities, financial arrangements, and transaction costs that the consumer experiences while using them. In addition, it is thought necessary to distinguish between partially substitutable employee talents dealing with supply chain management and marketing personnel for each of these types of retail outlets. The basic attempt was to identify the conditions under which all three types can be integrated in a stable manner without harming the employment prospects of supply chain managers and employees and marketing personnel. The broad findings are as follows. SCS should cater to local, small size per transaction, and frequent purchases; DMM would be suitable when the trade is in durable goods and consumer services for which purchases are infrequent Further, they should cater to products demanded in small quantities in local markets if SCS finds it inefficient to cater to them. Similarly, DMM would be best suited to cater to a vertical chain of wholesale and retail distributors and manufacturing. FDI can be justified only when domestic finances are inadequate for DMM to accommodate specific product groups. Such developments of FDI will improve the supply chain of SCS as well as DMM and will have a salutary effect on their growth. Failure to approach retail FDI in such a systematic manner will create a loss in employment in the retail sector primarily because FDI, and to a certain extent DMM, will dry up the supply chain of SCS.

  1. Emeritus Professor, Indian Institute of Technology, Kan pur. E-mail:

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Gender Development Index : An Interstate Analysis of India

Mrs. Seozy Bhatia1
Paramjeet Kaur Dhindsa 2

The paper reports on a wide range of gender inequalities existing across different states of India with the help of working out Gender Development Index. The present study intends to find out nature and extent of sex inequalities among various states in India. We have used secondary data for collecting information on various dimensions and have applied formulas to find value of GDI. Further we have arranged various states rank wise to find out extent of inequalities in various states in India and its comparison with India as a whole. If we divide India into six divisions on the basis of geographical division that is as these states and Union Territories are situated in India, then these divisions can be Northern region which include states and Union Territories like Haryana, Punjab, Chandigarh, Delhi, Himachal Pradesh etc. These all states are enjoying higher GDI values than national average as a whole.

Eastern region which consists of Bihar and Orissa have far lower value of 0.47 and 0.56 as compared to India's value of 0.62. North-Eastern region which include states of Assam, Arunachal Pradesh, Manipur, Meghalaya, Tripura, Mizoram, Nagaland shows that they have value fluctuating in and around 0.62 depicting that here gender development is following middle path that is they are falling within GDI range from tenth to twelfth. Southern region of India comprising of states and Union Territories of Andhra Pradesh, Kerela, Karnataka, Tamil Nadu, Pondicherry shows higher GDI value than India as a whole. Western region of India consisting of states like Gujarat, Goa, Maharashtra etc having GDI value above 0.62. We consider Madhya Pradesh as central region of India. Its GDI value is 0.56 and rank is fifteenth that is much lower than many states and Union Territories of India. The paper suggests that government can in many ways create the conditions for gender equality by encouraging supportive institutional environments.

  1. Senior Research Fellow, Punjab School of Economics, Guru Nanak Dev University, Amritsar, Punjab, India. E-mail:

  2. Professor, Punjab School of Economics, Guru Nanak Dev University, Amritsar, Punjab, India. E-mail:

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Agricultural Productivity in Pakistani A Dilemma of Strategic Reforms

Mazhar-ul-Haq Baluch 1

Prioritizing the significance of agricultural sector various strategic measures comprising direct and indirect involvement of public Sector have been experienced overtime. Land reforms, extensive irrigation system, mechanization and expansion in adoption of biochemical technology remained the focused activities of strategic reforms implemented time and again. In addition provision of inputs and other promotional facilities such as proper economic environment, research and extension services has been extended to raise productivity and incomes at the farm level. Scenario of past performance was developed. Livestock had emerged as a structural adjusting sub-sector within agriculture. Wide variation was observed in productivity as progressive grower's farm and national average, which identified potential productivity to be explored.

  1. Senior Research Fellow, Lahore School of Economics, Main Campus, Barki Road, Lahore, Pakistan.
    E-mail: drbaluch@hotmailcom

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Economic growth, Human Capital Accumulation and Liberalization: A Time-Series Evidence from India

Jayanti Bhattacharjee1
Sushil Kr. Haldar2

In this paper we have tried to determine the key factors influencing economic growth in India for the period 1960-2007. We have used Lucas type production function involving the factors, physical capital (investment as a share of GDP), human capital (mean years of schooling) and openness (trade as a ratio of GDP), assuming openness to affect growth via total factor productivity. The exogenous impact of liberalisation has also been explored using a policy dummy variable, Dopen. Johansen's Maximum Likelihood method has been used to estimate the parameters. Human capital and openness have been found to have significant influence on economic growth in India in the long-run. The robustness of the results has been reconfirmed using the ARDL approach of cointegration.

  1. Assistant Professor, Department of Economics, N. S. Mahavidyalaya, Udaipu Tripura-799120, India,
  2. Associate Professor, Department of Economics, jadavpur University, jadavpu Kolkata-700032, India

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Generalised Purchasing Power Parity among the real Exchange Rates of India and Japan vis-a-vis US Dollar

Soubarna Pal1

Using annual data (1969-2004) and applying Johansen method of co-integration we examine whether India's liberalisation of 1991 had any effect on the long run relationship between the real exchange rates of India and Japan vis-a-vis US dollar. Johansen method of co-integration shows a substantial change in the relationship among these two real exchange rates before and after India's liberalisation of 1991.

  1. Assist. Prof., Indian Institute of Social Welfare & Business Management, Kolkata, Management House, College Square West, Calcutta-700073.

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Twin Deficits Phenomenon in India: An Econometric Analysis

Debobrata Mitra1
Kanchan Datta 2

There has been a plethora of studies concerning die relationship between fiscal balance and trade balance. The over all findings can be classified under two broad hypotheses. One is known as twin deficit hypothesis which implies there does exist a relationship between BD and CAD and BD Granger Causes to CAD. On the other hand, there is alternative hypothesis that is known as Ricardian Equivalence Theorem which negates any such relation. This study involves f FS data; where the real BD and CAD data series are used and they are used in terms of percentage of GDP. This study is based on a battery of tests like, ADF, PP unit root test, followed by the estimation of Cointegration, Vector ECM, VAR and Granger Causality. This study supports the Ricardian Equivalence Hypothesis in the economy of India over the period of the study.

  1. Professor, Department of Commerce, University of North Bengal.
  2. Lecturer in Economics, St Joseph's College, Darjeeling, West Bengal.

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