Causality between Indian Exports, Imports, and Agricultural, Manufacturing GDP
Singh and Kónya (2006) studied the relationship between Indian GDP, exports, and imports from 1950/51 to 2003/2004. A logical further step is to investigate the same issue for two major sectors of the Indian economy: agriculture and manufacturing. In both sectors there is evidence of Granger causality between GDP and total exports, imports. In particular, agricultural GDP causes imports, exports cause agricultural GDP, and any two variables jointly cause the third one. There is also some evidence for agricultural GDP causing exports, and imports causing agricultural GDP, though these results are sensitive to model specification. As regards manufacturing, there seems to be two-way causality between manufacturing GDP and exports, imports cause manufacturing GDP, manufacturing GDP and imports jointly cause exports, and exports and imports jointly cause manufacturing GDP, but manufacturing GDP and exports do not seem to cause imports. Finally, there is also some evidence for manufacturing GDP causing imports, but this result is also sensitive to model specification.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.latrobe.edu.au/economics|
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