T.K. Jayaraman

Role of remittances in India’s economic growth

India has been among the top ten remittance recipient countries in the world since the 1970s. In the context of the ongoing worldwide recession and uncertain export prospects, mobilisation of foreign exchange earnings has assumed greater importance. Given the intensification of financial sector development together with relatively stable capital inflows (FDI and ODA) and the efforts towards formalising the channels of remittance inflows, we find that remittances and the interaction between remittances and financial sector development have had a positive and significant effect on growth over the last four decades (1970–2009). In the light of these findings, it is proposed that the proactive policy measures in India should continue for encouraging remittance inflows for long-term growth and development.

Growth Constraints and Determinants of a South Pacific Island in a Global Economy: A Study of Fiji

Abstract In a global economy, the South Pacific islands face unique constraints to growth. The study investigates whether Fiji was benefited by three-decade old open trade policies. Through a multivariate cointegration analysis, the study establishes the existence of a long-run relationship between open trade policy and physical and human capital resources. Although physical capital had a positive impact on growth, the existing complementary relationship between two kinds of capital requires that a threshold between physical and human capital needs to be attained before any negative influence on growth can be transformed into positive impact.

Fiscal and Monetary and Policy Responses to Global Economic Downturn in Small Island Developing States: An Empirical Study of Mauritius

Mauritius has emerged as a top performer amongst the small island states in mitigating the adverse effects of the weakening external demand due to the 2008 financial and 2009 global economic downturn, the lingering effects of which are now compounded by the Eurozone debt crisis since late 2011. Mauritius has successfully responded to the crisis with appropriate fiscal and monetary policies. This paper seeks to evaluate the relative effectiveness of the policies adopted by Mauritius over a 30 year period with an empirical study. The study concludes that in the short-run, expansionary fiscal policy rather than monetary policy had significant effects on economic growth. In contrast, in the long run, monetary policy is found to be more effective than fiscal policy.