Education and Economic Development in India

This brief survey examines the returns to education in India , and then examines the role of education on both economic growth and economic development with particular reference to India. Throughout, the objective is to draw out the implications of the empirical results for education policy. The results suggest that female education is of particular importance in India. They also suggest that perhaps because of the externalities it generates, primary education is more important than might be deduced from its relatively low private rate of return.

Official Central Bank Interventions in the Foreign Exchange Markets: A DCC Approach with Exogenous Variables

This paper assesses the impact of official central bank interventions (CBIs) on exchange rate returns, their volatility and bilateral correlations. By exploiting the recent publication of intervention data by the Bank of England, this study is able to investigate fficial interventions by a total number of four central banks, while the previous studies have been limited to three (the Federal Reserve, Bundesbank and Bank of Japan). The results of the existing literature are reappraised and refined. In particular, unilateral CBI is found to be more successful than coordinated CBI. The likely implications of these findings are then discussed.

Does the euro dominate Central and Eastern European money markets?

The so-called German Dominance Hypothesis (GDH) claimed that Bundesbank policies were transmitted into other European Monetary System (EMS) interest rates during the pre-euro era. We reformulate this hypothesis for the Central and Eastern European (CEE) countries that are on the verge of accessing the eurozone. We test this \Euro Dominance Hypothesis (EDH)" in a novel way using a global vector autoregressive (GVAR) approach that combines country-speci c error correction models in a global system. We nd that euro area monetary policies are transmitted into CEE interest rates which provides evidence for monetary integration between the eurozone and CEE countries. Our framework also allows for introducing global monetary shocks to provide empirical evidence regarding the e ects of the recent nancial crisis on monetary integration in Europe.

The Changing Inter-Industry Wage Structure of the Organised Manufacturing Sector in India, 1973-74 to 2003-04

This study examines the inter-industry wage structure of the organised manufacturing sector in India for the period 1973-74 to 2003-04 by estimating the growth of average real wages for production workers by industry. In order to estimate the growth rates, the study adopts a methodological framework that differs from other studies in that the time series properties of the concerned variables are closely considered in order to obtain meaningful estimates of growth that are unbiased and (asymptotically) efficient. Using wage data on 51 manufacturing industries at three digit level of the National Industrial Classification 1998 (India), our estimation procedure obtains estimates of growth of real wages per worker that are deterministic in nature by accounting for any potential structural break(s). Our findings show that the inter-industry wage structure in India has changed a lot in the period 1973-74 to 2003-04 and that it provides some evidence that the inter-industry wage differences have become more pronounced in the post-reforms period. Thus this paper provides new evidence from India on the need to consider the hypothesis that industry affiliation is potentially an important determinant of wages when studying any relationship between reforms and wages.

The Economics of CO2-EOR Cluster Developments in the UK Central North Sea/ Outer Moray Firth

NORTH SEA STUDY OCCASIONAL PAPER No. 123

The Signalling Channel of Central Bank Interventions: Modelling the Yen/US Dollar Exchange Rate

This paper presents a theoretical framework analysing the signalling channel of exchange rate interventions as an informational trigger. We develop an implicit target zone framework with learning in order to model the signalling channel. The theoretical premise of the model is that interventions convey signals that communicate information about the exchange rate objectives of central bank. The model is used to analyse the impact of Japanese FX interventions during the period 1999 -2011 on the yen/US dollar dynamics.

The Signalling Channel of Central Bank Interventions: Modelling the Yen/US Dollar Exchange Rate

This paper presents a theoretical framework analysing the signalling channel of exchange rate interventions as an informational trigger. We develop an implicit target zone framework with learning in order to model the signalling channel. The theoretical premise of the model is that interventions convey signals that communicate information about the exchange rate objectives of central bank. The model is used to analyse the impact of Japanese FX interventions during the period 1999 -2011 on the yen/US dollar dynamics.

The past, present and future of central banking

The financial crisis, on the one hand, and the recourse to ‘unconventional’ monetary policy, on the other, have given a sharp jolt to perceptions of the role and status of central banks. In this paper we start with a brief ‘contrarian’ history of central banks since the second world war, which presents the Great Moderation and the restricted focus on inflation targeting as a temporary aberration from the norm. We then discuss how recent developments in fiscal and monetary policy have affected the role and status of central banks, notably their relationships with governments, before considering the environment central banks will face in the near and middle future and how they will have to change to address it.

Central banks and house prices in the run-up to the crisis

The financial crisis and the role played within it by fluctuations in house prices has reopened the debate about whether monetary policy should respond to asset prices. This paper investigates how the central banks of the euro area, the UK and the US considered, understood and responded to the trends in house prices in the six or seven years preceding the crisis, and how they have analysed those developments since the crisis. It suggests that these central banks, particularly the Anglo-Saxon ones, might have been able to take some useful action if they had devoted more intellectual resources to analysing the possible misalignments of house prices and been willing to act on them.

Inequalities in Child Mortality in India: A District-Level Analysis

This paper measures the degree of inequality in child mortality rates across districts in India, using data from the 1981, 1991 and 2001 Indian population censuses. The results show that child mortality is more concentrated in less developed districts in all three census years. Further, between 1981 and 2001, the inequality in child mortality seems to have increased to the advantage of the more developed districts (i.e., there was an increasing concentration of child mortality in less developed districts). However, the inequality in female child mortality rates seems to have declined between 1991 and 2001, even as it increased – albeit at a slower rate than before – for male child mortality rates. In the decomposition analysis, it is found that while a more equitable distribution of medical facilities and safe drinking water across districts did contribute towards reducing inequality in child mortality between 1981 and 1991, different levels of structural change among districts were responsible for a very large part of the inequality in child mortality to the advantage of the more developed districts in all three census years. Other variables which played important roles in increasing inequality included a measure of infrastructure development, female literacy, and a social group status variable. The paper concludes with some brief comments on the policy implications of the findings.

The relationship between public education expenditure and economic growth: The case of India

The paper reviews the theoretical and the empirical case for public investment in education in India. Though the theoretical literature provides a backing for such a policy, the empirical literature fails to find a robust relation between education expenditure and growth. Expenditure on education is a necessary but not a sufficient condition for growth. It seems that the effectiveness of education expenditure depends on the institutional and labour market characteristics of the economy. The effectiveness of education investments also depends on other factors such as trade openness. Due to these aforesaid factors, we argue that the empirical relation between education expenditure and growth for India has been inconsistent.

Relationship between trade openness and economic growth of India: A time series analysis

The paper aims to examine the empirical relationship between trade openness and economic growth of India for the time period 1970-2010. Trade openness is a multi-dimensional concept and hence measures of both trade barriers and trade volumes have been used as proxies for openness. The estimation results from Vector Autoregressive method suggest that growth in trade volumes accelerate economic growth in case of India. We do not find any evidence from our analysis that trade barriers lower growth.