Macroeconomic effect of NBFC default shock in India: a four-sector DSGE model

Arvind Awasthi and Siddharth Shukla

Macroeconomics and Finance in Emerging Market Economies, 2025, vol. 18, issue 2, 361-381

Abstract: In this study a four-sector dynamic stochastic general equilibrium model is developed by introducing banks and non-banking financial companies (NBFCs) in a general two-sector real business cycle model in context of Indian economy. Examining the impact of three shocks namely NBFC default shock, productivity shock and investment shock, default of NBFC on its loan does not have any significant impact on aggregate output, consumption and investment. The shock has localized impact on the NBFC sector itself because of its low asset size and weak interconnectedness with the Indian economy. Productivity and investment shock have significant impact on the macroeconomic variables.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/17520843.2024.2377476 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:macfem:v:18:y:2025:i:2:p:361-381

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REME20

DOI: 10.1080/17520843.2024.2377476

Access Statistics for this article

Macroeconomics and Finance in Emerging Market Economies is currently edited by Subrata Sarkar and Ashima Goyal

More articles in Macroeconomics and Finance in Emerging Market Economies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().