Input Shortages in Mixed Economies: An Application to Indian Manufacturing Industries
June 1, 1991
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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.
Subject: Capacity utilization, Commodities, Economic sectors, Electricity, Import licensing, International trade, Manufacturing, Production, Trade barriers
Keywords: Capacity utilization, Eastern Europe, economic system, Electricity, gth industry, Import licensing, industry index, infant industry, least squares, Manufacturing, quota allocation rule, rail service input coefficient in industry, representative firm, Trade barriers, WP
Pages:
30
Volume:
1991
DOI:
Issue:
056
Series:
Working Paper No. 1991/056
Stock No:
WPIEA0561991
ISBN:
9781451847666
ISSN:
1018-5941
