PAPERS- VOLUME 2, ISSUE 1 (Sept.-2016)

Exports and Economic Growth A Causality Test for Indian Economy

Pawan Kumar
Kanika Sharma


The present study proposes to investigate the causality between exports and economic growth (GDP) in India over the period 1972-2014. In the investigation of economic growth the role of the export variable has been emphasized. The study takes into account the recent advances in econometric techniques. The Co-integration test indicates that there is co-integration between exports and economic growth in India during the above said study period. Using the Granger causality test, we empirically find that there is unidirectional causality between exports and economic growth. In other words, causality runs from exports to economic growth and not vice versa. More specifically the study supports export-led growth (ELG) hypothesis.

Keywords: Keywords: Keywords: Exports, Economic Growth, Gross Domestic Product (GDP), Stationary, Unit Root, Augmented Dickey-Fuller (ADF) Test, Co-integration, Granger Causality, India.

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