Munich Personal RePEc Archive

Does monetary policy have differential state-level effects? an empirical evaluation

Nachane, D M and Ray, P and Ghosh, S (2001): Does monetary policy have differential state-level effects? an empirical evaluation. Published in: Economic and Political Weekly , Vol. 36, (23. November 2001)

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Abstract

The paper examines whether monetary policy has similar effects across major states in the Indian polity. Impulse response functions from an estimated Structural Vector Auto Regression (SVAR) reveal two sets of states: a core of states that respond to monetary policy in a significant fashion vis-à-vis others whose response is less significant. The paper attempts to trace the reasons for the differential response of these two sets of states in terms of financial deepening and differential industry mix.

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