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

D M Nachane, P Ray and Saibal Ghosh

MPRA Paper from University Library of Munich, Germany

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.

Keywords: monetary policy; regional effect; optimum currency area (search for similar items in EconPapers)
JEL-codes: R11 E52 (search for similar items in EconPapers)
Date: 2001-11-23
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