Input Shortages in Mixed Economies: An Application to Indian Manufacturing Industries

Author/Editor:

Ratna Sahay

Publication Date:

June 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 1991/056

Subject:

Capacity utilization Commodities Economic sectors Electricity Import licensing International trade Manufacturing Production Trade barriers

English

Publication Date:

June 1, 1991

ISBN/ISSN:

9781451847666/1018-5941

Stock No:

WPIEA0561991

Pages:

30

Please address any questions about this title to publications@imf.org