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Inflation in Nigeria: 1970-2001
Olajide Sunday Oladipo*
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The objective of this
paper is to determine whether inflation in
Nigeria is mainly imported (via high
import prices and exchange rate movements)
or predominantly a function of domestic
factors such as money supply. The paper
attempts to contribute to the debate on
the cause of inflation in many ways.
First, the sample size is relatively large
when compare with sample size of previous
studies on inflation in Nigeria. Second,
and more important, most studies on
inflation in Nigeria paid little attention
to the time series properties of the data,
we avoid these shortcoming in this study.
Third, we employ the Johansen Maximum
Likelihood approach, which is a
multivariate estimation technique that
uncovers long run stationarity among sets
of non-stationary data.
Although both domestic money supply and
exchange rate movements have significant
influences on the behaviour of inflation
rate in the long run, the short run
dynamics based on Error Correction Model
further confirm the influence of these
factors on domestic price level.
The policy consideration given our results
implies that any attempt to combat
inflation in Nigeria, the policy makers
need to focus on reduction on money
supply, stabilization of the Naira
exchange rate vis-a-vis our trading
partners' currencies.
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Technical Efficiency in Freshwater
Aquaculture in Uttar Pradesh
Anjani Kumar *, K. Elumalai **
and
Badruddin *
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Fishing as an occupation is reckoned to be
a supplementary enterprise practiced by
the fishermen community on subsistence
level. In recent years, the share of
inland fish production increased more than
marine fisheries in total fish production.
But, low productivity of fresh water
aquaculture is a cause of concern. In this
study, an attempt was made to examine the
technical efficiency and its determinants
of freshwater aquaculture in Banda
district of Uttar Pradesh. Data were
collected through primary survey conduced
during 2002-03. Data Envelopment Analysis
(DEA) was used to estimate technical
efficiency. The study results showed that
the average size of pond of small, medium
and large fish farmers were 0.32, 0.70 and
2.98 ha, respectively. Though, small
fishponds were more productive with the
yield level of 1198kg/ha, but the unit
cost of production was higher than medium
and large farms. The pure technical
efficiency score for large farms was 0.88,
indicating they are more efficient in
utilizing the resources than small and
medium farms. All the farms were found
scale inefficient. Of the various factors
that determine the level of technical
efficiency training, aquaculture
experience, family size and distance from
output and input markets were found to be
significant.
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Estimation of 'Conditional' Optimal
Commodity
Tax Rates for Urban India
for 1973-74 and 1987-88
A. K. Seth*
and
Ankur Bhatnagar **
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This
paper estimates optimal commodity tax
rates for two years 1973-74 and 1987-88
for urban India. NSS data is used
pertaining to 16 selected states for urban
India. Optimality is defined in the
'Ramsey' spirit of maximizing social
welfare subject to a revenue requirement.
These tax rates are 'conditional' on the
observed levels of prices, demand and
expenditures. This study uses the
Restricted Non-Linear Preference System (RNLPS).
The tax rates are demonstrated for
different revenue requirements and
different degrees of inequality in the
income distribution in the economy.
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Factors Characterizing Capitalized Banks :
The Indian Experience
M. Banumathi *
and
G. Ramathilagam **
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The BIS capital standards that emerged
from the Basle Accord (1988) underscored
the need for shoring up bank capital in
all countries, developed as well as
developing. With the capital to risk
adjusted assets ratio norm at 8 per
cent, attempted to be achieved in
stages, commercial banks came under
greater scrutiny from the researchers,
regulators and the depositors. This
paper explores the financial
characteristics of adequately
capitalized banks as against under
capitalized banks, using a set of 14
financial ratios and the multiple
discriminant analysis. The results
reveal that banks with greater activity
in contingent liabilities market, lower
liquidity ratios, lower operating costs
and higher returns on equity are likely
to be letter capitalized than others.
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Trends and Determinants of Capital
Formation
in Andhra Pradesh Agriculture
N. Chandrasekhara Rao *
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This
paper looks at the trends in capital
formation in Andhra Pradesh agriculture
and its composition vis-a-vis All-India.
The determinants of private capital
formation and efficiency of capital
formation are also worked out. The salient
feature of the study is that terms of
trade for agriculture are worked out and
used to find out its impact on private
capital formation in agriculture. There
was decline in the private and gross
capital formation in agriculture in the
state besides decline in public capital
formation in agriculture. The contribution
of private capital formation did not
exceed 50 percent in the post-reform
period also. The gross fixed capital
formation in agriculture per hectare of
net sown area in the state was less than
that at the All-India level. It was found
that there was complementary relationship
between public and private capital
formation in agriculture in the state.
However, there was no statistically
significant relation between terms of
trade for agriculture and private capital
formation.
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Default Risk Analysis of Public Ltd.
Companies in India during 1997-2002
Manoj Kumar Barik *
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This
paper is an attempt to analyze
credit-worthiness (credit risk in recent
terminology) of borrowers through the use
of some selected financial ratios.
Discriminant analysis technique is used to
differentiate defaulted from non-defaulted
groups. Balance Sheet and Profit & Loss
account data of a sample of 28 companies
has been analyzed for the period of
1997-2002. The results of the study show
92% of correct classification.
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Guanxi Decision-Making on Transactional
Behavior: A 'Potential Value of Social
Transaction' Perspective
Li Chang * and
PeircLyi Lii **
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In
this paper we use "potential value of
social transaction" " perspective to
explore the impact of differentiated
Guanxi on transactional decisions made by
Chinese, suggesting that the outcome of
Guanxi decision-making can be expressed
through by relational mark down (RMD) and
compensatory mark up (CMU). The offer of
RMD and CMU depends on the Guanxi base,
i.e. the strength of connection. We then
discuss some Chinese behavioral
characteristics and hopefully could help
Western enterprises develop better
relationships with Chinese counterparts.
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The
Main Determinants
of Inflation in Nigeria
Akinlo, Anthony Enisan *
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Studies on the relative importance of the
various factors (both internal and
external) in determining the rate of
inflation in Nigeria is still not yet
clear cut and controversial. Some of them
conclude that excess domestic demand
generated by expansionary fiscal and
monetary policies have been the principal
factor underlying the rising inflation
rate. Few others argue that cost-push
inflation resulting from excessive
devaluations and wage increases has been
the primary factor fuelling inflation in
Nigeria. There is need to resolve this
controversy. Thus, the main objective of
this paper is to provide clearer evidence
on the effect of monetary, fiscal and
interest rate policies on inflationary
pressures in Nigeria.
To achieve this objective, we developed a
small model of the interactions between
the main variables in the price formation
in Nigeria. Special attention is paid to
the role of interest rate in the
unorganised. market, oil price
fluctuations and prices of imported
inputs. The model is estimated by using
annual data covering the period 1970-2001.
Our results indicate that both domestic
and foreign factors are instrumental to
price increases in the Nigerian economy.
The results suggest that comprehensive
macroeconomic policies must be articulated
to combat inflation in Nigeria. Reduction
in money supply is necessary to moderate
the interest rate in the organised sector.
Exchange rate value needs to be properly
aligned to insulate the domestic economy
from externally generated inflation.
However, where the country runs balance
of payments deficit in the face of high
inflation (as is often the case in most
developing countries), the government
needs to encourage local sourcing of
industrial raw materials so that currency
depreciation would not compound external
balance.
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NOTES
AND MEMORANDA
Modeling Offshoring
Satwinder Singh
and
Torbjorn Fredriksson*
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Offshoring is an
internationally growing phenomenon that
has attracted worldwide attention of
scholars and public sector administrators
in both host and home nations. The popular
reason put forward for the phenomenal
growth of offshoring is the availability
of relatively cheap labour in host
countries. In this paper, we provide a
mathematical model of labour-saving
hypothesis of services as reflected in the
offshoring business. We also suggest two
additional factors to explain the growth
of off shoring : footloose characteristic
of most services, and firms' zest to
follow rivals move for move. Some
empirical evidence in support of the
suggested factors is provided. |
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