The purpose of this article is to assess the macro fiscal flows for India and determine what effect these flows will have on the stock market and the economy.
Macro fiscal flows impact investment markets with a lagged effect of typically one month. A flow of funds now from government spending or bank credit creation will lead to a boost in investment markets one month later.
To understand the fiscal flows, one has to look at the balance of sectoral flows within the Indian economy using stock flow-consistent sectoral flow analysis.
Professor Wynne Godley first