Is private investment being crowded out in India? Some fresh evidence

Jagadish Sahu () and Sitakanta Panda ()
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Jagadish Sahu: Institute of Economic Growth, Delhi, India
Sitakanta Panda: Institute of Economic Growth, Delhi, India

Economics Bulletin, 2012, vol. 32, issue 2, 1125-1132

Abstract: We reexamine the crowding out hypothesis for India for the period 1970-71 to 2009-10. Applying a flexible accelerator model in a VECM framework, we find that government investment crowds out private investment in the long run while GDP has a significantly positive impact on the later. We also find that in the long run causality runs from public investment and GDP to private investment.

Keywords: private investment; crowding out; India. (search for similar items in EconPapers)
JEL-codes: E2 E6 (search for similar items in EconPapers)
Date: 2012-04-04
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Citations: View citations in EconPapers (5)

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