'Do Fiscal Deficits Influence Current Accounts? A Case Study of India'

Autor:	Ashok Parikh, B. Bhaskara Rao
Rok vydání:	2006
Předmět:	Monetization media_common.quotation_subject Geography Planning and Development Developing country International economics Current account Monetary economics Development Investment (macroeconomics) Payment Crowding out Exchange rate Balance of payments Economics media_common
Zdroj:	Review of Development Economics. 10:492-505
ISSN:	1467-9361 1363-6669
DOI:	10.1111/j.1467-9361.2006.00370.x
Popis:	This paper examines the effects of fiscal deficits on the current account deficits in the Indian economy. In many developing countries, fiscal deficits are mostly financed through monetization, causing crowding out of private investment expenditures. However, fiscal deficits in India are mostly financed through official borrowings from various external sources, leading to higher interest payments and outgoings on the external account. Such a policy could eventually precipitate balance of payments crises despite favorable trade account and real exchange rate. Data over three decades for the Indian economy show that, in addition to the real exchange rate and the ratio of private investment to GDP, fiscal deficits significantly contribute to the current account deficits.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::058a4abbf639b3f4a5063af793f930a4 https://doi.org/10.1111/j.1467-9361.2006.00370.x Zobrazit plný text záznamu Plný text ve formátu PDF