RELATIONSHIP BETWEEN TRADE OPENNESS AND ECONOMIC GROWTH OF INDIA: A TIME SERIES ANALYSIS
RELATIONSHIP BETWEEN TRADE OPENNESS AND ECONOMIC GROWTH OF INDIA: A TIME SERIES ANALYSIS
Author(s): Monojit Chaterji, Sushil Mohan, Sayantan Ghosh DastidarSubject(s): Economy
Published by: Universitatea SPIRU HARET - Faculty of Accounting and Financial Management
Keywords: Trade openness; economic growth; India; time series analysis
Summary/Abstract: The empirical relationship between trade openness and economic growth of India has been a debatable issue. The existing literature fails to provide an unambiguous answer.The paper examines this empirical relationship for the time period 1970-2010 using Vector Autoregression method and demonstrates thatthe relationship has evolved over time following the regime change in the early 1980s when the Indian economy started to move from a state-led growth model to a pro-market regime. Therefore, any assumption of a static trade-growth nexus may lead to inaccurate findings.Our econometric results indicate that growth in trade volumes accelerates economic growth of India since 1980-81 onwards. We do not find evidence of any significant association between trade barriers and growth.
Journal: Journal of Academic Research in Economics (JARE)
- Issue Year: 6/2014
- Issue No: 1
- Page Range: 45-69
- Page Count: 25
- Language: English
- Content File-PDF