Shahe Emran, M; Shilpi, Forhad; Alam, M. Imam
Economic liberalization and price response of aggregate private investment: time series evidence from India
Teil von
  • The Canadian journal of economics, 2007-08, Vol.40 (3), p.914-934
Ort / Verlag
Malden, USA: Blackwell Publishing
Links zum Volltext
JSTOR Arts & Sciences II
This paper presents evidence on the effects of economic liberalization of 1991 on the price responsiveness of aggregate private investment in India. The wide ranging reforms are expected to increase the price response of private investment due to (i) the Le Chatelier effect, (ii) a higher price elasticity of demand for final goods, and (iii) possible relaxation of the credit constraint. The empirical results, based on alternative specifications, estimation methods, and sample periods, show a dramatic increase in the price response; the elasticity of investment with respect to the relative cost of capital has increased five times after the dismantling of the `Licence Raj.'
ISSN: 0008-4085
ISSN: 1540-5982
DOI: 10.1111/j.1365-2966.2007.00436.x

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