Input Shortages in Mixed Economies [electronic resource] : An Application to Indian Manufacturing Industries / Ratna Sahay.
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TextSeries: IMF Working Papers; Working Paper ; No. 91/56Publication details: Washington, D.C. : International Monetary Fund, 1991Description: 1 online resource (30 p.)ISBN: 1451847661 :ISSN: 1018-5941Subject(s): Capacity Utilization | Import License | Imported Inputs | Intermediate Inputs | Quantitative Restrictions | IndiaAdditional physical formats: Print Version:: Input Shortages in Mixed Economies : An Application to Indian Manufacturing IndustriesOnline resources: IMF e-Library | IMF Book Store Abstract: Widespread shortages in key inputs are common in mixed economies of developing countries. These shortages appear to occur at the same time that relatively high rates of capacity underutilization in manufacturing industries are observed. This paper develops a simple model which explains the existence of excess capacity when there are quantitative restrictions on key inputs. This model is tested using data for manufacturing industries in India, and the results indicate that shortages in domestic rather than imported inputs imposed binding constraints on capacity utilization rates.
Widespread shortages in key inputs are common in mixed economies of developing countries. These shortages appear to occur at the same time that relatively high rates of capacity underutilization in manufacturing industries are observed. This paper develops a simple model which explains the existence of excess capacity when there are quantitative restrictions on key inputs. This model is tested using data for manufacturing industries in India, and the results indicate that shortages in domestic rather than imported inputs imposed binding constraints on capacity utilization rates.
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