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Export and Economic Growth in the Economy of India: An Econometric Study (1971-2005)

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  • Amit Kundu

Abstract

: This study examines the existence of any short-run and long-run relationship between GDP growth and export growth in India over the period 1971-2005. Income growth (Yt) and export growth (Xt) are found to be stationary variables and both the series are I(0). There exists a long-run relationship between income growth and export growth. The estimation of Vector Error Correction (VEC) model confirms the stability of the long-run relationship. The study with VAR model confirms the presence of unidirectional causality . The Impulse Response Functions (IRS) indicate that export shocks were long-lived for economic growth. Variance decomposition study firmly confirms that export shocks were more important than income shocks in accounting for short-run variations in export growth.

Suggested Citation

  • Amit Kundu, 2010. "Export and Economic Growth in the Economy of India: An Econometric Study (1971-2005)," The IUP Journal of Applied Economics, IUP Publications, vol. 0(4), pages 35-58, October.
  • Handle: RePEc:icf:icfjae:v:09:y:2010:i:4:p:35-58
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