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Exports, Imports and Economic Growth in India

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  • László Kónya

    ()
    (Department of Economics and Finance, La Trobe University)

  • Jai Pal Singh

    (Department of Business Management CCS Haryana Agricultural University, Hisar, India)

Abstract

With the advent of WTO, India entered into the era of trade reforms in 1991 and is moving gradually towards an open economy. It is widely believed that export and import growth is crucial in providing the impetus for economic growth in developing countries and imports provide the important 'virtuous' link between trade and output growth. Therefore, our aim, here, is to address the export/import-led growth and growth-driven export/import hypotheses for India. In spite of some ambiguity, the results clearly show that exports and imports Granger-cause GDP, both individually and jointly, lending support to the export/import led growth hypotheses. There is also some indication of GDP and exports jointly Granger- causing imports, and GDP and imports jointly Granger-causing exports, but the growth driven export/import hypotheses seem implausible. A possible reason for the results is the favourable trade environment of India.

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Bibliographic Info

Paper provided by School of Economics, La Trobe University in its series Working Papers with number 2006.06.

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Length: 25 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:ltr:wpaper:2006.06

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Keywords: Export; Import; Economic Growth; India; Unit root; Co-integration; Causality EDIRC Provider-Institution: RePEc:edi:smlatau;

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Cited by:
  1. repec:ltr:wpaper:2007.02 is not listed on IDEAS
  2. László Kónya & Jai Pal Singh, 2007. "Causality between Indian Exports, Imports, and Agricultural, Manufacturing GDP," Working Papers 2007.02, School of Economics, La Trobe University.

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