Tracking the transmission channels of fiscal deficit and food inflation linkages: A structural var approach

Title

Tracking the transmission channels of fiscal deficit and food inflation linkages: A structural var approach

Creator

Mishra A.

Description

This empirical analysis aspired to unearth the transmission channels of fiscal deficit and food inflation linkages in the Indian perspective by reasonably exerting the data for 1991 to 2017. The precise results of structural vector autoregressive (SVAR) analysis proffered that there were three different mechanisms of transmission such as consumption, general inflation, and import channels that led to food inflation in response to the high fiscal deficit. The first channel revealed that government deficit spending had a positive impact on income which further led to food inflation through surging the household consumption expenditure. It was concluded that fiscal deficit passed through general inflation finally leading to a food price surge in the economy and seemed to work as cost-push inflation for the food and agricultural industry. The outcome also revealed that the impact of fiscal deficit passed to food inflation through external linkages such as import and export. 2020 The Society of Economics and Development, except certain content provided by third parties.

Source

Indian Journal of Economics and Development, Vol-16, No. 2, pp. 165-172.

Date

2020-01-01

Publisher

The Society of Economics and Development

Subject

Fiscal deficit; Food inflation; SVAR

Coverage

Mishra A., Department of Economics, CHRIST (Deemed to be University), Delhi NCR Campus, Marium Nagar, Ghaziabad Uttar Pradesh, 201003, India

Rights

Restricted Access

Relation

ISSN: 22775412

Format

Online

Language

English

Type

Article

Identifier

https://doi.org/10.35716/IJED/19129

https://www.scopus.com/inward/record.uri?eid=2-s2.0-85111100992&doi=10.35716%2fIJED%2f19129&partnerID=40&md5=fe20d54f8b042a1e88d8ea7fc18c5336