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Does Devaluation work for India?

Author

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  • Artatrana Ratha

    () (St. Cloud State University)

Abstract

Whether currency devaluation helps economic growth is an empirically open question. Despite its policy-implications, the issue has received relatively scant econometric attention. Since the results are specific to the sample, model, and techniques employed, country-specific studies have received renewed interest. Coexistence of successive currency devaluations and a booming economy makes India a unique case-study. Using latest data and the bounds-testing approach to cointegration and error-correction modeling, this paper finds that rupee's devaluation is expansionary in India.

Suggested Citation

  • Artatrana Ratha, 2010. "Does Devaluation work for India?," Economics Bulletin, AccessEcon, vol. 30(1), pages 247-264.
  • Handle: RePEc:ebl:ecbull:eb-09-00392
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    References listed on IDEAS

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    1. repec:bla:coecpo:v:35:y:2017:i:3:p:472-483 is not listed on IDEAS
    2. repec:bla:worlde:v:40:y:2017:i:10:p:2226-2254 is not listed on IDEAS
    3. Mohsen Bahmani & Hanafiah Harvey & Scott W. Hegerty, 2013. "Empirical tests of the Marshall-Lerner condition: a literature review," Journal of Economic Studies, Emerald Group Publishing, vol. 40(3), pages 411-443, May.
    4. Muhammad Shahbaz & Faridul Islam & Naveed Aamir, 2012. "Is devaluation contractionary? Empirical evidence for Pakistan," Economic Change and Restructuring, Springer, vol. 45(4), pages 299-316, November.
    5. Yu Hsing, 2016. "Is Real Depreciation Expansionary? The Case of Ireland," Bulletin of Applied Economics, Risk Market Journals, vol. 3(1), pages 1-9.
    6. repec:bpj:glecon:v:13:y:2017:i:1:p:6:n:7 is not listed on IDEAS
    7. Tiwari, Aviral & Shahbaz, Muhammad, 2011. "India's trade with USA and her trade balance: An empirical analysis," MPRA Paper 29023, University Library of Munich, Germany.

    More about this item

    Keywords

    Devaluation; Expansionary effects; India; Rupee; bounds-testing; cointegration;

    JEL classification:

    • F3 - International Economics - - International Finance

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