European Parliament Library

Disentangling India’s Investment Slowdown, Rahul Anand, Volodymyr Tulin

This paper documents the recent slowdown in investment in India and explores its underlying causes. The sharp investment deceleration has sparked an intense debate about the role of interest rates, as well as business confidence and economic policy uncertainty. Our results suggest that while explaining aggregate investment activity better than nominal interest rates, real interest rates account for only one quarter of the explained investment downturn. In addition, standard macro-financial variables do not fully explain the recent investment slump. Using a new measure of economic policy uncertainty, the results suggest that heightened uncertainty and deteriorating business confidence have played a key role in the recent investment slowdown
Table Of Contents
Cover; Contents; I. Introduction; II. Background; A. The Recent Investment Slowdown in India: Some Facts; Figures; 1. GDP Growth and Capital Formation; B. What Caused the Investment Slowdown?; 2. Shelved and New Investment Projects; C. Where are Interest Rates in India?; D. Measuring Economic Policy Uncertainty; 3. Nominal Interest Rates; 4. Real Interest Rates; 5. Inflation and Fiscal Balance; 6. Components of Policy Uncertainty Index; 7. Overall Business Confidence and Economic Policy Uncertainty; 8. Economic Policy Uncertainty and New Investment Projects
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (19 p.)
Specific Material Designation
Form Of Item

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