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Financial
Development and Economic Growth in South Korea: A Note on Testing
Demand-following or Supply-leading Hypothesis
TSANGY
AO CHANG AND YUAN-HONG Ho |
In this note we empirically test two competing hypotheses,
namely those of the demand-following and supply-leading, using multivariate VAR
models for South Korea over the period 1953 to 1999. Our Johansen co
integration results indicate that there exist one co-integrating vector among
real GDP per capita, financial development, and the degree of openness these
three variables. The results from Granger causality tests based on multivariate
error-correction models (ECM) suggest unidirectional causality running from
financial development to economic growth. This empirical result supports the
supply leading hypothesis for South Korea. The major finding of this study has
important implication for the conduct of economic policy regarding the role of
financial development in South Korea over this sample period. |
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Youth Unemployment
Problem in Punjab: An Appraisal
M.S. SIDHU
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The major objective of the Indian planning is the
improvement of the level of living of the people. This cannot be equated with a
mere increase in production. There must also be an increase in employment, as
it is only through an increase in employment that a large number of people get
the benefit of increased production. Again, a mere increase in employment is
not enough, it has to be accompanied by an increase in productivity. Thus,
economic development should mean both increase in employment and increase in
earnings if it is to result in increase in welfare and not merely increase in
overall national production.
The progress made by the farm sector in the state of Punjab is so well-known
that one need not cite any statistics to prove this point. A number of factors
have made this possible. However, the future may not hold the production
possibilities realised earlier (Rangi and Sidhu, 1998). The agriculture, which
was growing fast, has now reached a sort of plateau in terms of productivity
and production. In the wake of a declining land man ratio, it is not able to
generate gainful employment and sufficient income for the growing population (Grewal
and Sidhu, 1988). These economic factors along with other social, religious and
political factors created the Punjab problem in the 1980's and early 1990's.
The state had to pay a very high price for that decade of turmoil. The
unemployed youth of Punjab was mainly responsible for that era of militancy. As
already mentioned, other factors had played an important role, but the root
cause of unemployment particularly among the rural youth could not be totally
ignored. Therefore, the present study has been undertaken specifically:
(i) to examine the nature and extent of youth unemployment in Punjab;
(ii) to examine the causes of youth unemployment, and
(iii) to examine the consequences of youth unemployment. |
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Building a National Food Security System:
The Challenge and the Strategy
AKRAM
A. KHAN & FARHAD SHIRANI BIDABADI
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Improving food security for all is a widely debated and much
confused issue, but one of supreme importance to many million of people
worldwide. Ensuring that all tile world's population has enough food for a
healthy and productive life is among the most fundamental challenges we face.
Ensuring food security for all is the challenge with many dimensions. In the
short-run reducing hunger must focus at the household level with enabling
actions by the nations. Globally, only adequate supplies and food aid can help.
In the medium-term, the emphasis must be more at the national and individual
levels, focusing on reducing poverty and generating sustained economic
development for all. Central to that vision are concerned national and
international efforts to appropriate agricultural technology to improve
productivity and profitability of millions of farmers in developing countries.
In long-term, global food supplies must increase in sustainable production
systems to feed more than 9 billion people, and a fair trading system is vital.
Now question is that how difficult is challenges of food security ? There is
considerable disagreement about how easy or difficult it will be to meet the
challenge. Views range from "there is no problem" to "the Malthusian nightmare
is imminent". among these competing views, we believe that food security for
all is achievable in the medium and long run if individual and families,
nations and the international community take the necessary action but there can
be absolutely no complacency about the need for action, now. What we need to do
is adopt more urgent, targeted measures, quickly.
The successful effects of green revolution, which helped to avoid death and
famine in India, are beginning to fade with agriculture output reaching a
plateau with India's population is expected to reach approximately 1.5 billion
people by 2050, agriculture production needs to increase 100 percent. Shortage
of irrigation water, increasing salinity levels, and water logging of soil,
further add to the problem of food security. According to a report by the World
Watch Institute, global food supply will be reduced by an additional 10 percent
on account of spreading water shortages. Therefore, if these concerns food
security are left unaddressed, it will lead to widespread hunger and civil
unrest.
In this paper an attempt have been made to gauge the problem of food insecurity
in India. The paper presents the issues and reviews policies and programs to
improve food security. Food security problem has multiple dimensions that range
from ensuring the food supply at global, country and local levels to ensuring
sufficient effective demand for adequate food consumption. The ultimate goal of
an effective food security policy is to provide for individuals, adequate
dietary intake through availability and accessibility of food, which are
necessary conditions for nutritional well being. To improve the food security
situation, the specific nature of a population's food security problem must be
well understood. In this paper, our endeavor is to understand it. This paper
begins by defining food security with the objective of clarifying and
conceptualizing the key issues. The dimensions of the food security problem at
different levels are then described and food insecure people in different
economic contracts are identified. The paper concludes with a synthesis of
recommendations for priority policy actions. |
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Tax Deferral and the Efficiency of Private
Constant Annuities
CHU-SHIU LI, CHWEN-CHI
LIU & HSIAO-WEN HUNG
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This paper examines the dynamic behavior of the effect of
tax deferral on consumption and the demand for annuities. By using a continuous
model, we find that the introduction of deferred tax increases lifetime wealth.
In response to the expectation for the reduction of wage income in the future,
individuals tend to decrease instantaneous consumption and to increase assets
accumulation during the working period. |
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A Study on Production and Marketing of Wheat in
Punjab
P. S. RANG! AND M. S.
SIDHU
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The U. S. A., Canada, Argentina and India are the important
durum wheat producing countries of the world. With the development of rust free
semi-dwarf durum wheat varieties in the beginning of 1980' s, its cultivation
was again revived in north India particularly in the Punjab State. The area
under durum wheat remained stagnant around 65 to 67 thousand hectares for four
years from 1993-94 to 1996-97 but declined to about 33 thousand hectares Gust
half) during 1997-98. At present, the cultivation of durum wheat is
concentrated around mainly Khanna area. The cost of cultivation of the crop was
about Rs. 7759 per acre during the year 1998-99. The operational and fixed
costs were about 52 and 48 per cent respectively. The gross returns were Rs.
1261 I and net returns were estimated at Rs. 4852 per acre. The returns over
variable cost were about Rs. 8557 per acre. The study revealed that farmer's
sale price was Rs. 625 per qtl. which worked out to be about 76 per cent of the
miller's purchase price at Hyderabad in July, 1999. The wholesaler's sale price
was Rs. 825 per qtl. at the premises of the miller at Hyderabad in July, 1999.
Hence, the wholesaler had to bear a loss of Rs. 22 per qtl. which was about
three per cent of the miller's purchase price. Regarding the processing of
durum wheat, the net returns to the miller at Hyderabad was Rs. 10 per qtl. The
average international price of durum wheat (F. O. B. Gulf) was Rs. 5198 per ton
from January to June, 1999. Against this, the approximate price of durum wheat
produced in Punjab (F. O. B. Mumbai) was estimated at Rs. 9000 per ton in July,
1999. Under this scenario, the Indian exporters are not in a position to
complete with the bulk suppliers of U. S. A., Canada, etc. in the international
market for durum wheat. |
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Innovation and Technological Resilience Need of
the Hour Handlooms
B. REVATHY
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The customers are more cost conscious. An attempt is made in
this paper, to analyze the various elements of cost of production of handlooms
and power loom weavers co-operative societies in Erode District, TamilNadu. The
study provides a comparative picture of the cost of production of hand loom
weavers co-operative societies with that of the powerloom weavers co-operative
societies. The paper identifies the reasons for high raw material and in
comparable labour cost in the handloom societies. The study calls for the
promotion of handlooms through the upgradation of looms. The study concludes
that the handlooms are to imbibe the sprit of innovation and technological
resilience. |
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Explaining Inter-state Differentials in
Total Factor Productivity Growth in Indian Manufacturing Sector
SUNIL
KUMAR
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This paper explores the effect of various socio-economic
variables in explaining the inter-state differentials in total factor
productivity (TFP) growth of Indian manufacturing sector. The results reveal
considerable inter-state differences in TFP growth in Indian manufacturing
sector. The industrially developed states experienced either a decline or low
growth in TFP during 1969-95. The 'deregulatory policy regime' imparted a
positive effect on the TFP growth of Indian manufacturing sector at national
and state levels during 1980s. The most recent phase of liberalization since
1991 failed to mark any significant dent on TFP growth pattern of Indian
manufacturing sector. The multivariate regression analysis determining the
factors responsible for inter-state differentials in TFP growth highlights that
TFP growth is positively associated with the degree of urbanization and growth
of infrastructural facilities. Also, the higher bureaucratic control and
worsening industrial relations due to increase in man-day lost per employee
hampered the TFP growth. |
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Stock Market Volatility & Household's
Consumption: The Indian Experience 75-76: 1998-99
N. K. TANEJA & J. C.
SHARMA
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Paper argues that the temporary uncertainty about future
income created due to the extreme stock market gyrations affect the consumption
behaviour of the households' in such a way that they tend to forego purchases
of durable assets. Given the fact that stock markets witnessed large
fluctuations particularly after initiation of economic reforms in June 1991,
this paper tests empirically the following propositions: first, under the
assumption of rational expectations only lagged consumption is enough to
predict the current of future levels of consumption as predicted by the
modified version of the Permanent Income Hypothesis / Life Cycle Hypothesis;
second, only unanticipated policy changes or surprises have explanatory value
for predicting consumption to the extent that they affect the permanent income
of the households and only when their effects are permanent and not transitory;
third, the uncertainty or surprises created by the extreme movements in share
prices influences the consumption decisions of the households in such a way
that they tend to depress their expenditure in durable/semi-durable goods and
may increase the consumption of non-durable or perishable goods. The first
proposition does not hold empirically in Indian economy as lagged consumption
is not found to have much explanatory value and even in the presence of its
non-zero coefficient, the current and past values real per capita income levels
partially explains the consumer's behaviour. Because of this income sensitivity
of consumption, it is observed that the uncertainty or the surprises created by
the extreme stock market fluctuations also affect the consumption decisions of
households via changing their perceptions about the estimates of permanent
income. The empirical results also reveal that consumer also structure their
consumption expenditure almost in accordance of the hypothesis summarized in
the third proposition. |
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Economics of Dryland Farming: A Study in
Manapparai Taluk Tiruchirapalli District in Tamilnadu.
K. REVATHI
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Dryland farming occupies a unique position in the
agricultural scenario of the country and plays an important role in the food
system of India. In Tamilnadu state also dry land farming is important and
widely practiced. But dry land farmers face many problems. They have to work
with much risk and uncertainty. The only solution to the problems of dry land
is a new dry farming technology. If the technology are transferred to and
successfully adopted by the dry land farmers, it may be possible to increase
productivity of and income from dry lands substantially.
In order to study these problems in Tamilnadu and to provide solutions, a
typical dry farming area in Trichirapalli district viz., Manapparai taluk, is
studied. |
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