Bank credit risk, grain production and the Indian economy

Research output: Contribution to journalArticle

Abstract

We generate measures of banking risk across Indian states and examine the relationship between banking risk and economic production in India. We find that banking risk co-moves with total grain production (TPG) and real gross domestic product (RGDP). The long-term impact of banking risk differs across Indian states. Ten states are negatively affected while one state maintains growth in RGDP. Likewise, the results show that six states are negatively affected while two states maintain growth in TPG. Banking risk is found to induce a larger decline in TPG than in RGDP at the national and state levels. Overall, banking risk shocks induce negative effects on both TPG and RGDP.
Original languageEnglish
Pages (from-to)1-15
Number of pages15
JournalApplied Economics
DOIs
Publication statusE-pub ahead of print - 6 May 2020

Keywords

  • Banking risk
  • India
  • RGDP
  • grain

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