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Reassessing the Dynamic Links between Trade and Growth: New Empirical Evidence from India - Un riesame delle relazioni tra commercio estero e crescita economica:nuova evidenza empirica per l’India

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  • Tronzano, Marco

    () (Università degli Studi di Genova, Dipartimento di Economia e Metodi Quantitativi)

Abstract

This paper reassesses the dynamic links between trade and growth in India during the post-independence period. The main result is a short-run bi-directional relationship between exports and output growth. This finding is supported both by standard Granger causality tests, and by an alternative estimator which is robust to the integration and cointegration properties of the VAR process. Moreover, I document a long-run unidirectional causal effect from exports to imports growth. I discuss the policy implications of this evidence and conclude that a neutral policy regime, not discriminating between export and strategic domestic sectors, represents a suitable development strategy for India. - L’articolo esamina le relazioni di causalità tra commercio estero e crescita in India nel periodo successivo alla sua indipendenza. Il risultato principale è l’esistenza di una relazione bidirezionale di breve periodo tra esportazioni e crescita economica. Questo risultato è supportato sia dai tradizionali test di causalità di Granger, che da uno stimatore alternativo indipendente dalle proprietà di integrazione e cointegrazione delle serie storiche utilizzate. Viene inoltre evidenziata l’esistenza di una relazione causale di lungo periodo dalla crescita delle esportazioni a quella delle importazioni. La parte finale del lavoro discute le implicazioni di politica economica di questi risultati e conclude che un regime neutrale, che non discrimina tra settori orientati alle esportazioni e settori orientati al mercato interno, rappresenta la strategia di sviluppo più appropriata per l’India.

Suggested Citation

  • Tronzano, Marco, 2010. "Reassessing the Dynamic Links between Trade and Growth: New Empirical Evidence from India - Un riesame delle relazioni tra commercio estero e crescita economica:nuova evidenza empirica per l’India," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(2), pages 217-244.
  • Handle: RePEc:ris:ecoint:0595
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    References listed on IDEAS

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    Keywords

    Economic Growth; Trade; Granger Causality Tests; India;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F10 - International Economics - - Trade - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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