First published in 1999, this influential volume explores Macroeconomic Adjustment with a particular focus on India. Its inspiration originated from the introduction of stabilisation and structural adjustment policies in India in 1991. Mallick examines the application of this policy package by the International Monetary Fund and the World Bank to Developing Economies. First looking at the initial conditions and generators of imbalances, the appropriate policy framework for India's initial conditions and structural characteristics is considered. While the effectiveness of the IMF had been strongly criticised, Mallick explains how it could be used more effectively. He argues that the programs applied are often contradictory and, using India as an example, examines the effects of policy reform on its trade sector, the repercussions on the direct economy and the costs associated with such policies in restoring stability and future economic growth, with particular support for the Vector Autoregression (VAR) framework. Mallick forwards a new structural model for policy purposes, evaluated for overall performance and optimal control.
Table of contents:
1. Introduction. 2. Macroeconomic Adjustment in India: Nature of the Policy Setting. 3. Annals of Indian Macroeconomic Modelling Efforts. 4. Policy Models for Growth-Oriented Macroeconomic Adjustment: An Analytical Critique. 5. Dynamics of Macroeconomic Adjustment with Growth: Some Simulation Results. 6. A Dynamic Macroeconometric Model for Short-Run Stabilisation. 7. Determinants of Long-Term Growth: A Keynesian Approach. 8. Designing Adjustment Policies with Growth in the Optimal Control Framework. 9. Conclusion.