Emerald | Indian Growth and Development Review | Table of Contents http://www.emeraldinsight.com/1753-8254.htm Table of contents from the most recently published issue of Indian Growth and Development Review Journal en-gb Tue, 04 Nov 2014 00:00:00 +0000 2014 Emerald Group Publishing Limited editorial@emeraldinsight.com support@emeraldinsight.com 60 Emerald | Indian Growth and Development Review | Table of Contents http://www.emeraldinsight.com/common_assets/img/covers_journal/igdrcover.gif http://www.emeraldinsight.com/1753-8254.htm 120 157 Optimal Tax and Expenditure Policy in the Presence of Emigration - Are Credit Restrictions Important? http://www.emeraldinsight.com/journals.htm?issn=1753-8254&volume=7&issue=2&articleid=17115952&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - Empirical studies have found an inverted-U curve relationship between emigration and per capita income. In this paper, a theoretical underpinning for this phenomenon is presented based on credit restrictions. The implications for tax policy are also analyzed.<B>Design/methodology/approach</B> - Using an intertemporal general equilibrium model, the authors characterize how the presence of an 'inverted U-curve'relationship between emigration and per capita income will in?uence the optimal tax and expenditure policy in a country where agents have the option to move abroad.<B>Findings</B> - Among the results it is shown that if age dependent taxes are available, the presence of an inverted-U curve provides an incentive to tax young labor harder, but old labor less hard, than otherwise.<B>Originality/value</B> - Our migration model fits the empirical facts of migration better than most of the migration models previously used in the optimal taxation literature. Article literatinetwork@emeraldinsight.com (Kenneth Backlund, Tomas Sjögren, Jesper Stage) Tue, 04 Nov 2014 00:00:00 +0000 Banking the unbanked: the Mzansi intervention in South Africa http://www.emeraldinsight.com/journals.htm?issn=1753-8254&volume=7&issue=2&articleid=17115880&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - This paper aims to understand household’s latent behaviour decision making in accessing financial services. In this analysis we look at the determinants of the choice of the pre-entry Mzansi account by consumers in South Africa. <B>Design/methodology/approach</B> - We use 102 variables, grouped in the following categories: basic literacy, understanding financial terms, targets for financial advice, desired financial education and financial perception. Employing a computationally efficient variable selection algorithm we study which variables can satisfactorily explain the choice of a Mzansi account. <B>Findings</B> - The Mzansi intervention is appealing to individuals with basic but insufficient financial education. Aspirations seem to be very influential in revealing the choice of financial services and to this end Mzansi is perceived as a pre-entry account not meeting the aspirations of individuals aiming to climb up the financial services ladder. We find that Mzansi holders view the account mainly as a vehicle for receiving payments, but on the other hand are debt-averse and inclined to save. Hence although there is at present no concrete evidence that the Mzansi intervention increases access to finance via diversification (i.e. by recruiting customers into higher level accounts and services) our analysis shows that this is very likely to be the case. <B>Originality/value</B> - The issue of demand side constraints on access to finance have been largely ignored in the theoretical and empirical literature. This paper undertakes some preliminary steps in addressing this gap. Article literatinetwork@emeraldinsight.com (Philip Kostov, Thankom Arun, Samuel Annim) Tue, 04 Nov 2014 00:00:00 +0000 Does Money Matter in Africa? New Empirics on Long- and Short-run Effects of Monetary Policy on Output and Prices http://www.emeraldinsight.com/journals.htm?issn=1753-8254&volume=7&issue=2&articleid=17115879&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - While in developed economies, changes in monetary policy affect real economic activity in the short-run but only prices in the long-run, the question of whether these tendencies apply to developing countries remains open to debate. In this paper, we examine the effects of monetary policy on economic activity using a plethora of hitherto unemployed financial dynamics in inflation-chaotic African countries for the period 1987-2010. <B>Design/methodology/approach</B> - VARs within the frameworks of VECMs and simple Granger causality models are used to estimate the long-run and short-run effects respectively. A battery of robustness checks are also employed to ensure consistency in the specifications and results. <B>Findings</B> - But for slight exceptions, the tested hypotheses are valid under monetary policy independence and dependence. Hypothesis 1: Monetary policy variables affect prices in the long-run but not in the short-run. For the first-half (long-run dimension) of the hypothesis, permanent changes in monetary policy variables (depth, efficiency, activity and size) affect permanent variations in prices in the long-term. But in cases of disequilibriums only financial dynamic fundamentals of depth and size significantly adjust inflation to the cointegration relations. With respect to the second-half (short-run view) of the hypothesis, monetary policy does not overwhelmingly affect prices in the short-term. Hence, but for a thin exception Hypothesis 1 is valid. Hypothesis 2: Monetary policy variables influence output in the short-term but not in the long-term. With regard to the short-term dimension of the hypothesis, only financial dynamics of depth and size affect real GDP output in the short-run. As concerns the long-run dimension, the neutrality of monetary policy has been confirmed. Hence, the hypothesis is also broadly valid. <B>Practical implications</B> - A wide range of policy implications are discussed. Inter alia: the long-run neutrality of money and business cycles, credit expansions and inflationary tendencies, inflation targeting and monetary policy independence implications. Country/regional specific implications, the manner in which the findings reconcile the ongoing debate, measures for fighting surplus liquidity, caveats and future research directions are also discussed. <B>Originality/value</B> - By using a plethora of hitherto unemployed financial dynamics (that broadly reflect monetary policy), we provide significant contributions to the empirics of money. The conclusion of the analysis is a valuable contribution to the scholarly and policy debate on how money matters as an instrument of economic activity in developing countries. Article literatinetwork@emeraldinsight.com (Simplice A Asongu) Tue, 04 Nov 2014 00:00:00 +0000 Targeting, Cascading, and Indirect Tax Design http://www.emeraldinsight.com/journals.htm?issn=1753-8254&volume=7&issue=2&articleid=17115947&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - This paper addresses two fundamental issues in indirect tax design. It first revisits the case for reduced rates on items especially important to the poor, and then explores the welfare costs from cascading taxes<B>Design/methodology/approach</B> - Applied theory<B>Findings</B> - On the first issue, the paper establishes conditions under which even very crudely targeted spending measures better serve the interests of the poor than does reduced taxation of particular commodities looming large in their consumption. On the second, it shows that these may actually be lower the wider the set of inputs that are taxed but, more to the point, may plausibly be large even at a low nominal tax rate and with relatively few stages of production: contrary to a common mantra, "a low rate on a broad base" is not always good policy.<B>Originality/value</B> - Both issues addressed in the paper are recurrent and central concerns in the design of indirect taxes in general, and the VAT/GST in particular. I am not aware of other treatments at all comparable in perspective or results. I hope the analysis will prove useful in many contexts where these issues arise - not least in India, where these issues are central to discussions of VAT/GTS reform Article literatinetwork@emeraldinsight.com (Michael James Keen) Tue, 04 Nov 2014 00:00:00 +0000 Poverty by Social, Religious and Economic Groups in India and Its Largest States 1993-94 to 2011-12 http://www.emeraldinsight.com/journals.htm?issn=1753-8254&volume=7&issue=2&articleid=17115889&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - The purpose is to ground in serious empirical evidence the debate on whether the post-reform acceleration in growth has helped bring poverty down for all economic, social and religious groups and in all state or has left certain groups or states.<B>Design/methodology/approach</B> - The paper uses unit-level data from the so-called thick rounds of expenditure surveys by National Sample Survey (NSS) in the years 1993-94, 2004-05, 2009-10 and 2011-12 and estimates the proportion of the population below the official Tendulkar Line. Adequate care is taken to address the issue of sample size in reporting the estimates. <B>Findings</B> - Whether we slice the data by social, religious or economic groups, by states or by rural and urban areas, poverty has significantly declined between 1993-94 and 2011-12 with a substantial acceleration during the faster-growth period of 2004-05 to 2011-12. Poverty rates among the disadvantaged social groups and minorities have declined faster so that the gap in poverty rates between them and the general population has declined. In seven of the sixteen states with large Muslim populations, the poverty rate for them is now below that for the Hindus.<B>Research limitations/implications</B> - Use of survey data has its limitations, especially when the sample sizes are small. The paper also does not assess the direct contribution of growth in relation to that through redistribution. <B>Practical implications</B> - The paper presents implications for identification of the poor for the purpose of designing targeted interventions.<B>Originality/value</B> - This is the first paper to offer up-to-date estimates of poverty by social, religious and economic groups, by states and by rural and urban areas. Article literatinetwork@emeraldinsight.com (Arvind Panagariya, Vishal More) Tue, 04 Nov 2014 00:00:00 +0000