Browsing by Author "Ghosh, T."

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Does forward looking Taylor rule forecast Indian data well?
(International Journal of Academic Staff (IJAS – 2019), Volume 01, Issue 01. Department of Social Statistics, Faculty of Social Sciences, University of Kelaniya, Sri Lanka, 2019) Ghosh, T.; Parab, M.
Forward looking Taylor rule bodes well for many inflation targeting economies. This paper looks at forecast accuracy and predictive efficiency of a forward looking Taylor rule for India especially after its adoption of flexible inflation targeting in 2015. Our analysis shows that a forward looking Taylor rule fits well for India, especially when augmented using an external benchmark like the exchange rate or the US monetary policy. Using generalized method of moments (GMM) technique a la Clarida et al (1998), we analyze the forecasting efficiency of the Taylor rule using three interest rates namely, weighted average call money rate (WACMR), 91-day treasury bills rate and 364-day treasury bills rate. The 364-day treasury bills rate provides the best estimate of Taylor rule. It is the only interest rate that is significantly influenced by the output gap. Reserve Bank of India (RBI) follows a forward looking Taylor rule during normal times. It deviates from the rule during crises as it did for Asian and global financial crises
Is money relevant for determining output and prices? - An empirical analysis of six countries
(International Journal of Academic Staff (IJAS – 2019), Volume 01, Issue 01. Department of Social Statistics, Faculty of Social Sciences, University of Kelaniya, Sri Lanka, 2019) Ghosh, T.; Gupta, V.
An important policy question is whether the policy decisions can be based on models that do not include monetary aggregates. Practical considerations suggest that money should be included in the policy rule of the central bank. One such consideration is the fact that the central bank usually does not have contemporaneous information on inflation and output, but it has information about money stock. Money will help the monetary authority to directly determine the crucial variables. This paper investigates the relationship between money-output and money-prices and also examines whether the Divisia monetary aggregates better explains this relationship in comparison to simple sum monetary aggregates. Six countries such as the Euro area, India, Israel, Poland, the UK and the US were included for the analysis. The study finds that there is a high pairwise correlation between money-output and money-prices. The Johansen co-integration test confirms the existence of co-integrating relations between the variables used in our analysis. Further, the vector error correction model (VECM) is used to ascertain the short run and long run dynamics of the variables. We find that in the VECM model, the disequilibrium gets restored in the subsequent periods. Hence, money has a predictive power in determining output and prices. The Granger causality test confirms that the existence of causality between money-output and money-prices. Hence, our study shows that the money matters, especially the Divisia money as it gives a stronger and stable relationship between money-output and money-prices.
The macroeconomics of gender equality
(International Journal of Finance & Economics, 2020) Ghosh, T.; Ramanayake, S. S.
This study investigates the association between gender gap and economic progress. Using a panel VAR study as well as a comprehensive gender gap index and its sub-indices from the World Economic Forum, the study confirms the existence of bidirectional Granger causality between gender gap and economic progress, for OECD countries and developing countries. On the one hand, economic progress encourages equity for both sexes. On the other hand, gender equity helps developing nations prosper and significantly improve their human capital, which, in turn, drives long-run economic progress. By contrast, closing the gender gap negatively affects OECD output. For the sample of developing countries, the aforementioned results are robust to sub-indices measured by gender gap in economic participation as well as opportunity, educational attainment, and political empowerment. We recommend that gender policies specifically aim at eliminating gaps in female education.