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In this article we design an econometric test for monotone comparative statics (MCS) often found in models with multiple equilibria. Our test exploits the observable implications of the MCS prediction: that the extreme (high and low) conditiona l quantiles of the dependent variable increase monotonically with the explanatory variable. The main contribution of the article is to derive a likelihood-ratio test, which to the best of our knowledge is the first econometric test of MCS proposed in the literature. The test is an asymptotic “chi-bar squared” test for order restrictions on intermediate conditional quantiles. The key features of our approach are: (1) we do not need to estimate the underlying nonparametric model relating the dependent and explanatory variables to the latent disturbances; (2) we make few assumptions on the cardinality, location, or probabilities over equilibria. In particular, one can implement our test without assuming an equilibrium selection rule.

This study is an attempt to estimate the output growth and total factor productivity growth (TFPG) in Indian manufacturing industry. Most of the developed nations have been facing economic depression in its output and employment growth frequently which led to several worldwide recessions and developing nations have also been affected by these. Our objective is to examine a possible way of mitigating economic recession in the light of Indian experience. In these connections we have tried to establish a link between TFPG and indicators of economic growth like export, GDP, employment, etc. We have computed TFPG of Indian manufacturing industry for last 30 years. On an average TFPG of Indian manufacturing industry has been found negative with a declining trend. Time series analysis of our study reveals that all the variables are stationary at first difference. They are also found to be co-integrated. On the basis of volumes of India's exports of manufacturing products in 2017, we have selected top 27 destination countries. More than 60% of Indian's manufacturing products were exported to these countries in this year. We have conducted panel data analysis to find the relation between TFPG and growth of India's export. The result shows that there has been a positive and significant relation between these two. This study also found that there has been a positive relation between growth of gross value added and employment growth in Indian manufacturing industry. So, TFPG may be a useful way to mitigate economic recession.