IDEAS home Printed from https://ideas.repec.org/a/ers/ijebaa/viiiy2015i4p53-71.html
   My bibliography  Save this article

Macroeconomic Implications of Capital Inflows in India

Author

Listed:
  • Dr. Md. Izhar Ahmad
  • Tariq Masood

Abstract

The study attemts to analyse the behaviour of some macroeconomic variables in response to Total Capital Inflows in India using quarterly data for the period 1994-2007. The paper consist two sections, in first section we have analysed trend behaviour of macroeconomic variables included in the study. Time trend of all variables except NEERX, NEERT and CAB shows instability over the period of study. In second section we have have made an attempt to impirically analyse the behaviour of some macroeconomic variables. With the help of DF, ADF and Schmidt & Phillips test we have concluded that CAB is the only variable which stationary in level form all othe variables are stationary in first difference form. Cointegration test confirms the long run equilibrium relation between REERX & TCI, REET &TCI and between NEERX & TCI. Granger causality test confirms the bidirectional causality between REERX & TCI and between FOREX & TCI and unidirectional causality from TCI to REERT.

Suggested Citation

  • Dr. Md. Izhar Ahmad & Tariq Masood, 2015. "Macroeconomic Implications of Capital Inflows in India," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 53-71.
    • Handle: RePEc:ers:ijebaa:v:iii:y:2015:i:4:p:53-71
    as

    Download full text from publisher

    File URL: http://www.ersj.eu/repec/ers/pijeba/15_4_p5.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eleftherios Thalassinos & Erginbay Ugurlu & Yusuf Muratoglu, 2012. "Income Inequality and Inflation in the EU," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 127-140.
    2. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    3. Indrani Chakraborty, 2001. "Economic reforms, capital inflows and macro economic impact in India," Centre for Development Studies, Trivendrum Working Papers 311, Centre for Development Studies, Trivendrum, India.
    4. Ms. Renu Kohli, 2001. "Capital Flows and Their Macroeconomic Effects in India," IMF Working Papers 2001/192, International Monetary Fund.
    5. Renu Kohli, 2004. "Capital Flows and Domestic Financial Sector in India," International Finance 0405012, University Library of Munich, Germany.
    6. Eleftherios I. Thalassinos & Mike P. Hanias & Panayiotis G. Curtis & John E. Thalassinos, 2013. "Forecasting Financial Indices: The Baltic Dry Indices," International Journal of Maritime, Trade & Economic Issues (IJMTEI), International Journal of Maritime, Trade & Economic Issues (IJMTEI), vol. 0(1), pages 109-130.
    7. Indrani Chakraborty, 2003. "Liberalization of capital inflows and the real exchange rate in India: A VAR analysis," Centre for Development Studies, Trivendrum Working Papers 351, Centre for Development Studies, Trivendrum, India.
    8. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
    9. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    10. M. Hanias & P. Curtis & E. Thalassinos, 2012. "Time Series Prediction with Neural Networks for the Athens Stock Exchange Indicator," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 23-32.
    11. Schmidt, Peter & Phillips, C B Peter, 1992. "LM Tests for a Unit Root in the Presence of Deterministic Trends," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 257-287, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Masood, Tariq & Ahmad, Mohd. Izhar, 2009. "Macroeconomic Implications of Capital Inflows in India," MPRA Paper 19299, University Library of Munich, Germany, revised 06 Oct 2009.
    2. Narayan Sethi, 2012. "Inflows and their Macroeconomic Impact in India a VAR Analysis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 15(45), pages 93-142, December.
    3. Gary Cornwall & Jeff Chen & Beau Sauley, 2021. "Standing on the Shoulders of Machine Learning: Can We Improve Hypothesis Testing?," Papers 2103.01368, arXiv.org.
    4. Kunze, Frederik, 2017. "Predicting exchange rates in Asia: New insights on the accuracy of survey forecasts," University of Göttingen Working Papers in Economics 326, University of Goettingen, Department of Economics.
    5. Ghosh, Asim, 1996. "Cross-Hedging Foreign Currency Risk: Empirical Evidence from an Error Correction Model," Review of Quantitative Finance and Accounting, Springer, vol. 6(3), pages 223-231, May.
    6. Tung Liu & Lee C. Spector, 2005. "Dynamic employment adjustments over business cycles," Empirical Economics, Springer, vol. 30(1), pages 151-169, January.
    7. Esther Stroe-Kunold & Joachim Werner, 2009. "A drunk and her dog: a spurious relation? Cointegration tests as instruments to detect spurious correlations between integrated time series," Quality & Quantity: International Journal of Methodology, Springer, vol. 43(6), pages 913-940, November.
    8. Abhijit Sharma & Theodore Panagiotidis, 2003. "An Analysis of Exports and Growth in India: Some Empirical Evidence (1971-2001)," Working Papers 2003004, The University of Sheffield, Department of Economics, revised Nov 2003.
    9. Antonio Núñez, 2008. "Estimating the functional form of road traffic maturity," Post-Print halshs-00323046, HAL.
    10. Mariana Kaneva, 2019. "Broadband and e-Commerce in the Balkans - Econometric Analysis," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 8(2), pages 100-109, August.
    11. Fahmida Khatun & Syed Yusuf Saadat, 2020. "Fourth Industrial Revolution, Technological Advancement and Youth Employment: A South Asian Perspective," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 21(1), pages 58-75, March.
    12. Illes, Anamaria & Lombardi, Marco J. & Mizen, Paul, 2019. "The divergence of bank lending rates from policy rates after the financial crisis: The role of bank funding costs," Journal of International Money and Finance, Elsevier, vol. 93(C), pages 117-141.
    13. Francisco Rebelo & Ester Gomes da Silva, 2013. "Export variety, technological content and economic performance: The case of Portugal," Papers in Evolutionary Economic Geography (PEEG) 1310, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2013.
    14. Bradshaw, Girard W. & Orden, David, 1988. "Time Series Models For Exchange Rate And Agricultural Price Forecasts," Regional Research Projects > 1988: S-180 Annual Meeting, March 20-23, 1988, Savannah, Georgia 272786, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    15. Gil-Alana, Luis A., 2003. "A Univariate Analysis of Unemployment and Inflation in Italy: A Fractionally Integrated Approach," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 23(2), November.
    16. Jürgen Wolters & Uwe Hassler, 2006. "Unit root testing," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(1), pages 43-58, March.
    17. David Greasley & Les Oxley, 2010. "Cliometrics And Time Series Econometrics: Some Theory And Applications," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 970-1042, December.
    18. Monfort, Alain, 1992. "Quelques développements récents des méthodes macroéconométriques," L'Actualité Economique, Société Canadienne de Science Economique, vol. 68(1), pages 305-324, mars et j.
    19. Lubello, Federico, 2011. "Money Demand and Inflation: A Cointegration Analysis for Canada," MPRA Paper 54901, University Library of Munich, Germany.
    20. Gil-Alana, L., 1998. "Multivariate Tests of Fractionally Integrated Hypotheses," Economics Working Papers eco98/19, European University Institute.

    More about this item

    Keywords

    Capital inflows; cointegration analysis.;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:ijebaa:v:iii:y:2015:i:4:p:53-71. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ijeba.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.