Relationship between trade openness and economic growth of India: a time series analysis

Monojit Chatterji, Sushil Mohan, Sayantan Ghosh Dastidiar

Research output: Contribution to journalArticle

Abstract

The empirical relationship between trade openness and economic growth of India has beena debatable issue. The existing literature fails to provide an unambiguous answer. The paperexamines this empirical relationship for the time period 1970-2010 using VectorAutoregression method and demonstrates that the relationship has evolved over timefollowing the regime change in the early 1980s when the Indian economy started to movefrom a state-led growth model to a pro-market regime. Therefore, any assumption of astatic trade-growth nexus may lead to inaccurate findings. Our econometric results indicatethat growth in trade volumes accelerates economic growth of India since 1980-81 onwards.We do not find evidence of any significant association between trade barriers and growth.
Original languageEnglish
Pages (from-to)45-69
Number of pages25
JournalJournal of Academic Research in Economics
Volume6
Issue number1
Publication statusPublished - 1 Mar 2014

Keywords

  • Trade openness
  • economic growth
  • India
  • time series analysis

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