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ELG hypothesis is valid for India: An Evidence from Structural Causality

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  • Asghar, Zahid

Abstract

Causality is important for empirical analysis in economics but not easily detected. Therefore, it is always important that one should investigate the problem not only on statistical grounds but also add extra statistical information which may come from economic events happening over a time about the problem under study. This extra statistical information helps in introducing asymmetry in the relationship. Most of the studies are based on Granger Causality for determining causal direction between export and economic growth for individual countries. In this paper we use a method suggested by Hoover (2001) for detecting causality which incorporates extra statistical information, economic theory and statistical analysis. We apply this technique to a simulated data and also apply it to the export-led growth hypothesis for India. Our results indicate that there is unidirectional causality from export to economic growth.

Suggested Citation

  • Asghar, Zahid, 2009. "ELG hypothesis is valid for India: An Evidence from Structural Causality," MPRA Paper 16429, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:16429
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    References listed on IDEAS

    as
    1. Dierk HERZER & Felicitas NOWAK‐LEHMANN D. & Boriss SILIVERSTOVS, 2006. "Export‐Led Growth In Chile: Assessing The Role Of Export Composition In Productivity Growth," The Developing Economies, Institute of Developing Economies, vol. 44(3), pages 306-328, September.
    2. 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.
    3. Hoover,Kevin D., 2001. "Causality in Macroeconomics," Cambridge Books, Cambridge University Press, number 9780521002882.
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    More about this item

    Keywords

    Structural Causality; Conditional and Marginal probability distributions; Granger Causality; Export Led Economic Growth;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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