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Title: |
The Impact of Financial and Fiscal Variables on Economic Growth: The
Case of India and Korea |
| Author: |
Dua, Pami;
Rashid, Aneesa Ismail; Salvatore, Dominick |
| Author
Affiliation: |
U Delhi;
Oakland U; Fordham U |
| Source: |
International Economic Journal, Summer 2000, v. 14, no. 2, pp. 133-150 |
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Publication Date: |
Summer 2000 |
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Abstract: |
This paper applies a simple macroeconomic
model developed by Green and Murinde (1993) to Korea and India and
studies the potency of fiscal and financial policies. The fiscal
variables are real government spending, the income tax rate, and the
export tax rate; while financial policy variables are the official
interest rate, loans from commercial banks, foreign reserves or the
exchange rate and foreign capital inflows. Dummies for political
instability and financial reforms specific to the two countries are also
included. We find that while government expenditure, income taxes and
foreign capital inflows have the same effects in the two countries,
interest rates, money supply, foreign reserves and financial
liberalization have different effects, bringing out the differences in
the two economies. |
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