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Causal Relationship between Agricultural Exports and Exchange Rate: Evidence for India

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  • Dicle Ozdemir

Abstract

In this paper we empirically investigate the causal link between agricultural exports and real exchange rate in India employing linear and nonlinear causality analysis. We carry out our investigation using annual index of the quantity of agricultural exports in India and real US Dollar to Rupee exchange rate data which cover the period between 1961 and 2013. We find that there are no significant changes in the linear and nonlinear causal relations between agricultural exports and exchange rates over the sample period under investigation. However, our investigation does not provide any evidence of bidirectional or unidirectional causality between the agricultural exports to real exchange rate in India. It can be concluded that one of the key reasons for high levels of the quantity of agricultural exports in India is long-term economic growth, rather than the real value of Indian Rupee.

Suggested Citation

  • Dicle Ozdemir, 2017. "Causal Relationship between Agricultural Exports and Exchange Rate: Evidence for India," Applied Economics and Finance, Redfame publishing, vol. 4(6), pages 36-41, November.
    • Handle: RePEc:rfa:aefjnl:v:4:y:2017:i:6:p:36-41
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    References listed on IDEAS

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    5. Crispin M. Kapombe & Dale Colyer, 1999. "A structural time series analysis of US broiler exports," Agricultural Economics, International Association of Agricultural Economists, vol. 21(3), pages 295-307, December.
    6. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
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    Cited by:

    1. Karim Panahi & Monireh Dizaji & Arash Ketabforoush Badri, 2018. "The Role of the Agricultural Sector in Achieving Economic Development," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 3(11), pages 124-132, November.

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    More about this item

    Keywords

    agriculture export; exchange rate; causality; nonlinear; India;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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