7/23/2019 Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral Framework http://slidepdf.com/reader/full/rise-of-finance-real-estate-and-business-services-explorations-in-an-inter-sectoral 1/16 Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral Framework Sukanya Bose 1 Abhishek Kumar 2 1 National Institute of Public Finance and Policy 2 Indira Gandhi Institute of Development Research Macroeconomics of Modern Finance: A Multidisciplinary Approach, ICTS Bangalore, 2015 Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy) Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral Fram Macroeconomics of Modern Finance: A Mult / 16
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Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral Framework
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7/23/2019 Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral Framework
Two sets of contrary evidence on the question of growth of theservice sector vis--vis non-service sectors that have coexisted side byside for the Indian economy
long term equilibrium relationship of services with agricultural and
industrial sectors: Kaur, Bordoloi and Rajesh (2009), Debnath andRoy (2012
On the contrary, a second set of studies has failed to find aconvincing link between service sector and commodity (non-service)sector. Mitra(1988), B.B. Bhattacharya and Arup Mitra (1990).
In this paper we revisit this debate using input output andeconometric Framework.
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)
Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
All variables are integrated of order 1, implying that cointegration canexist.
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Construction Doesn’t Causes FINREBS 5.02 0.025FINREBS Doesn’t Causes Construction 0.4 0.5252
Trade Doesn’t Causes FINREBS 5.59 0.0181
FINREBS Doesn’t Causes Trade 3.22 0.0728
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
This paper tried to empirically explore the relation of FINREBS withthe rest of the sectors of the economy focusing on the period sincethe late 1990s.
Forward linkage from FINREBS to the rest of the economy is below
average compared to the rest of the sectors of the economy, andbackward linkage from FINREBS is amongst the lowest.
It is difficult to therefore imagine FINREBS as a ‘leading sector in theHirschman sense.
causality vis--vis most of the sectors of the economy run from theother sector to FINREBS, with agriculture allied being notableexception.
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult
A natural corollary of this result should be that as the rest of thesectors of the economy slow down, growth of FINREBS would slow.The fact this has not been the case and several of the cointegratingrelations are statistically insignificant mean that other impulses aregenerated from within FINREBS and elsewhere to support the growthin the sector
The variance decomposition of forecast error corroborates that a largepercentage of variation in the growth of FINREBS cannot beexplained by other sectors of the economy
Growth in FINREBS was made possible through a number of mitigating factors such as real estate lending and lending to other
sensitive sectors, investments in gold, land, Crony capitalism etc.It is fallout of the imbalance that the system today is saddled withhuge bad debt, large companies as willful defaulters and drasticslowdown in lending activities in the economy. The present pattern of finance-driven growth does not appear to be sustainable.
Sukanya Bose, Abhishek Kumar (National Institute of Public Finance and Policy)Rise of Finance, Real Estate and Business Services: Explorations in an Inter-Sectoral FramMacroeconomics of Modern Finance: A Mult