The present study aims to examine the relationship between government size and economic growth in India for the period from 1961 to 2018. Additionally, as a novel contribution, the current study also attempts to examine the existence of Armey curve and estimate the threshold level of government size in India. The empirical estimation uses time series analysis and employs quadratic ordinary least squares (OLS) function and autoregressive distributed lag (ARDL) bound testing approach to co-integration to examine the association between the variables. The result of the study confirms a long-run significant positive impact of government size on economic growth. The present study also finds the existence of Armey curve and supports the Armey curve hypothesis in India. There exists a positive impact of government size till the threshold level, and beyond the threshold level, the coefficient of economic growth tends to decrease. The estimated optimal government size is 11.89% for India; this shows that, currently, the government spends less than the optimum amount. It implies that India operates somewhere on the positive slope of the Armey curve, and there is a scope for the government to expand its size further. However, the findings of the study also suggest that a large size of the government can be harmful for the efficiency of economic growth; thus, adjusting the government at its optimum is crucial to the economy. JEL Classification: B23, C01, C87, H11, H50, O47
PurposeThe purpose of the paper is to explore the economic repercussions of potential India–USA free trade agreement (FTA) on the trade of agricultural commodities at HS 2-digit level.Design/methodology/approachThe analysis is undertaken by assuming tariff reduction in a phased manner using the World Integrated Trade Solutions (WITS)-SMART partial equilibrium model to identify the trade creation and trade diversion effects.FindingsOverall results show that both the trading partners gain from the proposed FTA. Trade creation dominates over trade diversion in India's analysis.Practical implicationsAn FTA between India and the USA could be an essential step toward more liberal trade regimes and provide enormous economic benefits to both countries. Government of both the countries should support deeper integration. This will create more job opportunities and generate prosperity in both economies.Originality/valueThere are numerous studies conducted on evaluating the impact of FTAs ratified between countries. But there are limited studies which evaluate the impact of the proposed India–USA FTA on the economies of both trading partners specifically on the agriculture sector.
PurposeThe present study aims to construct and compare Composite Environmental Sustainability Index (CESI) for 20 emerging countries for the period 1990–2020.Design/methodology/approachThe study constructs CESI using the principal component analysis (PCA). Furthermore, for the preparation of index weights, varimax rotation is used to get component loadings.FindingsThe study finds that the overall CESI values lies between 2 and 4.8 for the 20 emerging countries considered in the study. This study depicts a diverse picture of environmental sustainability among emerging countries. The study also shows the trend of CESI values from 1990 to 2020. The bottom three countries whose CESI is very low compared to others are Iran, South Africa and Saudi Arabia. However, Brazil, Columbia and Chile are top three highest scorers in 2020.Originality/valueThe study contributes to the literature by constructing a composite index comprising of three sub-indices to measure the environmental sustainability of an economy. These sub-indices include seven indicators that are more inclusive and comprehensive. To the authors' knowledge, this is a pioneering attempt in the construction of the index for emerging countries.
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