India: Effect of Income and Exchange rate Elasticities on Foreign Trade. Anshul Kumar Singh
|
|
- Philippa Lyons
- 6 years ago
- Views:
Transcription
1 India: Effect of Income and Exchange rate Elasticities on Foreign Trade Anshul Kumar Singh Indian Institute of Technology, Kanpur id: The Indian currency (rupee) has depreciated 39% in the last two years, and plunged 13% since May 13 and the falling rupee has substantially appreciated the revenues for the exporters, who receive more rupees for their dollar receipts. In this paper I analyze exchange rate and income elasticity of Indian imports and exports. I find a significant gap between domestic and foreign income elasticities (for exports and imports respectively) which points to a threat of growing trade deficits. In addition I also find that the exchange rate elasticity is positive for both India s exports and imports. This indicates that depreciation of the Indian Currency will increase both imports and exports for India. Keywords: Cointegration; Exchange rate and Income elasticity; India
2 1. Introduction For years after the 1991 crises, the Indian government contained the current account deficit to less than 2% of GDP. But in recent years, the deficit has ballooned to 1991-like levels, which is because partly to higher imports and more recently lower exports but nowdays exports have increased significantly because of large depreciation in Indian currency. Exchange rate is one of the important prices in an open economy since it affects so many business, investment and policy decisions. Thus, it is not surprising to learn that the study of exchange rate has been one of the most important areas of economic research over the past few decades. This body of research has experienced tremendous growth, especially in the post- Bretton Woods era in which foreign exchange rate has been highly volatile after the inception of the floating exchange rate regime in As we all know that India is once again facing a much worsened current account position leading to concerns of a crisis. India has always had current account deficit barring initial years in 2000s. The trade deficit is the major driving force of the current account deficit. Trade balances are affected by changes in the exchange rate. An appreciating exchange rate by making imports cheaper and exports more expensive can exacerbate the trade deficit. Trade balances are also impacted by national income changes. A rise in income of a country s trading partners will cause exports to increase and improve the trade position. An increase in domestic income leads to higher imports which worsens the trade position of a country. In this paper we analyze the responsiveness of Indian trade to the exchange rate and income. Income and exchange rate elasticties for exports and imports have been estimated for several countries such as China by Thorbecke (2006), Japan by Bahmani-Oskooee and Goswani (2004), the U.S. by Houthakker and Magee (1969), Mann and Plück(2005) and Chinn (2005), G-7 countries by Hooper, Johnson and Marquez (1998) and for several developed and developing countries by Marquez (1990). We contribute to this literature by examining these elasticities for India which to the best of my knowledge have not been analyzed in the literature. Through this we provide a more comprehensive understanding of the India s trade position. It is therefore important to understand the factors that impact the current account deficit or trade balance.
3 2. Background Study: The Indian currency (rupee) has depreciated 39 per cent in the last two years, and plunged 13 per cent since May 13. Growth, which had been between 8 to 9 per cent for around eight years, has fallen sharply, and is expected to be between 5 to 5.5 per cent during the current April-to-March ( ) financial year. From the past few years, as per report, the share of India s FII (Foreign institutional investors) in the developing markets has decreased considerably from 19.2 % in 2010 to 3.8% in the year As FII s are taking their investments out of the Indian markets, it has led to an increased demand for dollars, further leading to a spiraling rupee. However the falling rupee has substantially appreciated the revenues for the exporters, who receive more rupees for their dollar receipts. In terms of trade, India s exports to China in 2012 reached US$ 18.8 billion, whereas imports touched a total of US$ billion which is more than the double compared to exports and US which imports US$ 40 billion from India while exported only US$ 22 billion. As we all know that the nominal exchange rate is the rate at which currency can be exchanged. If the nominal exchange rate between the dollar and the Rupee is 50, then one dollar will purchase 50 Rupee. Exchange rates are always represented in terms of the amount of foreign currency that can be purchased for one unit of domestic currency. Thus, we determine the nominal exchange rate by identifying the amount of foreign currency that can be purchased for one unit of domestic currency. The real exchange rate is a bit more complicated than the nominal exchange rate, the movement of real and nominal exchange rate can be seen in figure1 since 1970, while the nominal exchange rate tells how much foreign currency can be exchanged for a unit of domestic currency, the real exchange rate tells how much the goods and services in the domestic country can be exchanged for the goods and services in a foreign country. When the real exchange rate is high, the relative price of goods at home is higher than the relative price of goods abroad. In this case, import is likely because foreign goods are cheaper, in real terms, than domestic goods. Thus, when the real exchange rate is high, net exports decrease as imports rise. Alternatively, when the real exchange rate is low, net exports increase as exports rise. Hence, Changes in imports and exports are affected by exchange rates and incomes (domestic and foreign respectively). In sections 3 and 4 we analyze the impact of exchange rate and income elasticity on imports and exports.
4 3. Data and Modeling: I have used yearly data from 1970 to I use the GDP of the US as a proxy for foreign income in the export demand function which restricts our sample another year. I estimate export and import demand functions according to equations (1) and (2) for total exports, total imports. All data are in logs hence all estimated parameters are elasticities. US GDP and CPI data are from World Bank and all data are from and Reserve Bank of India. The trade data is in millions of current US dollars which are multiplied by the real exchange rate to calculate real exports and imports Indian Currency. The real exchange rate is computed by multiplying the nominal exchange rate with prices for India and the foreign country. I use the indicator buying rate for the nominal exchange rate and consumer price index (CPI) for price levels of both countries as. E is the nominal exchange rate for INR to one unit of foreign currency (USD), is the foreign country s CPI and is the CPI for India both indices with 2005 as the base year. I use real GDP of India as a proxy for real income in the import demand function and real GDP of the US as a proxy of real foreign income in the export demand function. It would be more appropriate to use a trade weighted GDP for foreign income and a trade weighted exchange rate in the export demand functions but we opt to refrain from computing a GDP and exchange rate which are not readily observable. I compute elasticities with respect to the US dollar. The US has been a major destination for Indian exports for the entire sample period, in 2012 US imported US$ 40 billion (second most importer) from India while exported only US$ 22 billion, thus is the right choice for foreign income. I follow the literature in setting up the import and export functions as, (1) (2)
5 where M denotes real imports, X denotes real exports, r is the real exchange rate, GDP and GDP* are domestic and foreign real income respectively. If the variables are integrated of order one we can test for cointegration and compute exchange rate and income elasticities using the error correction framework. Estimation steps are as follows. First the order of integration of variables used are determined by unit root tests. Then lag length is chosen by considering several information criteria in an unrestricted VAR where maximum lag length is set at five given the size of the sample. In addition to Likelihood Ratio Tests and Final Prediction Error, Akaike, Schwartz, and Hannan Quinn information criteria are considered. Lag length is chosen based on the outcome of majority of the tests. Diagnostic tests are performed to ensure the model cointegration tests are performed on a correctly specified model. The Johansen (1991) VAR-based cointegration tests are implemented to test for the existence of a cointegrating relationship and to identify the cointegrating equation. Finally, vector error correction models based on the identified cointegrating equation are estimated. 4. Results: Unit root tests on variables indicate that all variables are integrated of order 1. Unit root test results are presented in Appendix A. We report the ADF, Phillips-Perron and KPSS unit root test statistics on each variable. Johansen cointegration estimation results of exchange rate and income elasticities of imports and exports show that a significant gap between income elasticities exists which points to a threat of growing trade deficits. In addition, exchange rate elasticities of both exports and imports are positive; indicating that a depreciation of the Indian currency will have a positive effect on both imports and exports. From table A we see that if India and US real income rose by 1% each, imports of goods and services would increase by 2.31% and exports of goods and services would decrease by 5.79%.
6 Table A : Results from the regression Total Imports Total Exports *standard error in parentheses Real Exchange Rate Elasticity ( )* ( )* Income Elasticity ( )* ( )* The results show that if domestic and foreign real income were to grow at the same pace, the trade deficit in India would widen considerably. Disaggregating trade elasticities does not completely eliminate the income elasticity gap for India. Overall, the income elasticity gap for all goods shows threat for the Indian trade balance. Turning now to exchange rate elasticity results I find that a 1% depreciation of the INR would lead to a 1.71 % decline in imports. The exchange rate elasticity for exports are positive but lack statistical significance. To make sense of these findings, the structure of Indian exports and imports needs to be scrutinized and this task will be undertaken in the next section. 5. Conclusions: I estimated exchange rate and income elasticities for India imports and exports and investigate the effect of an appreciating INR on Indian foreign trade. I found that a significant gap between income elasticities of imports and exports exists. The income elasticity for imports is significantly greater that exports which warns against increasing trade deficits over time. I also found exchange rate elasticities of both exports and imports to be positive indicating that a depreciation of the INR will have a positive effect on both imports and exports. We can also do some further study including primary goods imports/exports, oil/non-oil goods imports/exports to find the better idea about the elasticities and know it better that which one leading India to the trade deficit.
7 References: Bahmani-Oskooee M, Goswami GG (2004) Exchange rate sensitivity of Japan's bilateral trade flows. Japan and the World Economy 16(1): Bahmani-Oskooee, M. & F. Niroomand (1998). Long-run price elasticities and the Marshall Lerner condition revisited. Economics Letters 61: Chinn M (2005) Doomed to deficits? Aggregate U.S. trade flows re-visited. Review of World Economics 141: Cushman, D.O. (1987). US bilateral trade balances and the dollar. Economics Letters 24: Cushman, D.O. (1990). US bilateral trade equations: forecasts and structural stability. Applied Economics 22: Haynes, S.E., M. M. Hutchison & R. F. Mikesell (1996). US Japanese bilateral trade and the yen dollar exchange rate: an empirical analysis. Southern Economic Journal 52: Hooper, P., K. Johnson & J. Marquez (1998). Trade Elasticities for G-7 Countries. International Finance Discussion Papers No. 609 (Washington, DC, Federal Reserve Board, April). Houthakker, H.. & S. Magee (1969). Income and Price Elasticities in World Trade. Review of Economics and Statistics 51: Johansen, S. (1991). Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models. Econometrica, 59: Senhadji, Semlali, 1997, Time-Series of Structural Import Demand Equations A Cross Country Analysis, IMF Working Paper 97/132 (Washington: International Monetary Fund). Stern, Robert, 1973, The Balance of Payments: Theory and Economic Policy, (New York: Aldine Publishing Company). Stern, Robert, Francis, Jonathan, and Bruce Schumacher, 1976, Price Elasticities in International Trade An Annotated Bibliography, (London: MacMillan).
8 Figure 1 Nominal vs Real Exchange Rate Nominal Exchange Rate Real Exchange Rate Figure 2 Log Real Exports vs Imports log Real Exports USD Log Real Imports USD 1 0
9 Figure 3 Log Real GDP For India vs Log Trade Deficit Log Real GDP For India Log Trade Deficit 2 0
10 Appendix: Table A Unit Root Tests: Test/Variables GDP GDP* R Exports Imports ADF 1 Intercept Trend and Intercept None F.D Phillips- Perron 2 Intercept {13} {17} Trend and Intercept {2} None {3} {13} {41} {41} F.D {3} {3} {13} {6} KPSS 3 Intercept Trend and Intercept {3} {3} {3} F.D {3} {38} {41} {41} 1 Lag length is presented in square brackets. Lag length is selected based on Schwartz information criteria when maximum lag length is 9 2 Bandwidth is in square brackets and was chosen by Newey-West algorithm using Bartlett kernel. 3 Bandwidth is in square brackets.
The Bilateral J-Curve: Sweden versus her 17 Major Trading Partners
Bahmani-Oskooee and Ratha, International Journal of Applied Economics, 4(1), March 2007, 1-13 1 The Bilateral J-Curve: Sweden versus her 17 Major Trading Partners Mohsen Bahmani-Oskooee and Artatrana Ratha
More informationEffects of RMB Exchange Rate Fluctuation on China s Foreign Trade
Archives of Current Research International 2(2): 54-58, 2015, Article no.acri.2015.006 SCIENCEDOMAIN international www.sciencedomain.org Effects of RMB Exchange Rate Fluctuation on China s Foreign Trade
More informationExchange Rate Regimes and Trade Deficit A case of Pakistan
Advances in Management & Applied Economics, vol. 6, no. 5, 2016, 67-78 ISSN: 1792-7544 (print version), 1792-7552(online) Scienpress Ltd, 2016 Exchange Rate Regimes and Trade Deficit A case of Pakistan
More informationRelationship between Oil Price, Exchange Rates and Stock Market: An Empirical study of Indian stock market
IOSR Journal of Business and Management (IOSR-JBM) e-issn: 2278-487X, p-issn: 2319-7668. Volume 19, Issue 1. Ver. VI (Jan. 2017), PP 28-33 www.iosrjournals.org Relationship between Oil Price, Exchange
More informationImpact of Exchange Rate on Exports in Case of Pakistan
Impact of Exchange Rate on Exports in Case of Pakistan Khalil Ahmed Govt Civil Lines, Islamia College, Lahore, Pakistan. National College of Business Administration and Economics, Lahore, Pakistan. Muhammad
More informationAn Empirical Study on the Determinants of Dollarization in Cambodia *
An Empirical Study on the Determinants of Dollarization in Cambodia * Socheat CHIM Graduate School of Economics, Osaka University 1-7 Machikaneyama, Toyonaka, Osaka, 560-0043, Japan E-mail: chimsocheat3@yahoo.com
More informationREAL EXCHANGE RATES AND BILATERAL TRADE BALANCES: SOME EMPIRICAL EVIDENCE OF MALAYSIA
REAL EXCHANGE RATES AND BILATERAL TRADE BALANCES: SOME EMPIRICAL EVIDENCE OF MALAYSIA Risalshah Latif Zulkarnain Hatta ABSTRACT This study examines the impact of real exchange rates on the bilateral trade
More informationWorking Paper Series in Finance #00-07 PURCHASING POWER PARITY AND EMERGING SOUTH EAST ASIAN NATIONS. A. Razzaghipour* G.A. Fleming** R.A.
Working Paper Series in Finance #00-07 PURCHASING POWER PARITY AND EMERGING SOUTH EAST ASIAN NATIONS A. Razzaghipour* G.A. Fleming** R.A. Heaney** *Reserve Bank of Australia **Department of Commerce, Australian
More informationAssist. Prof. Dr. Nuray İslatince 1
THE ANALYSIS OF THE RELATIONSHIP BETWEEN TOTAL CREDITS OF TURKISH DEPOSIT BANKING SECTOR AND CURRENT BALANCE DEFICIT WITH VECTOR ERROR CORRECTION MODEL Assist. Prof. Dr. Nuray İslatince 1 ABSTRACT In Turkey,
More informationAn Empirical Analysis of the Relationship between Macroeconomic Variables and Stock Prices in Bangladesh
Bangladesh Development Studies Vol. XXXIV, December 2011, No. 4 An Empirical Analysis of the Relationship between Macroeconomic Variables and Stock Prices in Bangladesh NASRIN AFZAL * SYED SHAHADAT HOSSAIN
More informationDETERMINANTS OF BILATERAL TRADE BETWEEN CHINA AND YEMEN: EVIDENCE FROM VAR MODEL
International Journal of Economics, Commerce and Management United Kingdom Vol. V, Issue 5, May 2017 http://ijecm.co.uk/ ISSN 2348 0386 DETERMINANTS OF BILATERAL TRADE BETWEEN CHINA AND YEMEN: EVIDENCE
More informationCurrency Substitution, Capital Mobility and Functional Forms of Money Demand in Pakistan
The Lahore Journal of Economics 12 : 1 (Summer 2007) pp. 35-48 Currency Substitution, Capital Mobility and Functional Forms of Money Demand in Pakistan Yu Hsing * Abstract The demand for M2 in Pakistan
More informationVolume 35, Issue 1. Thai-Ha Le RMIT University (Vietnam Campus)
Volume 35, Issue 1 Exchange rate determination in Vietnam Thai-Ha Le RMIT University (Vietnam Campus) Abstract This study investigates the determinants of the exchange rate in Vietnam and suggests policy
More informationTHE J CURVE PHENOMENON: AN EVIDENCE FROM PAKISTAN
45 Pakistan Economic and Social Review Volume XLI, No. 1&2 (2003), pp. 45-58 THE J CURVE PHENOMENON: AN EVIDENCE FROM PAKISTAN HAFEEZ UR REHMAN and MUHAMMAD AFZAL* Abstract. Some previous studies that
More informationRelationship between Zambias Exchange Rates and the Trade Balance J Curve Hypothesis
International Journal of Finance and Accounting 2014, 3(3): 192-196 DOI: 10.5923/j.ijfa.20140303.06 Relationship between Zambias Exchange Rates and the Trade Balance J Curve Hypothesis Nsama Musawa School
More informationThi-Thanh Phan, Int. Eco. Res, 2016, v7i6, 39 48
INVESTMENT AND ECONOMIC GROWTH IN CHINA AND THE UNITED STATES: AN APPLICATION OF THE ARDL MODEL Thi-Thanh Phan [1], Ph.D Program in Business College of Business, Chung Yuan Christian University Email:
More informationEconomics 442 Macroeconomic Policy (Spring 2015) 3/23/2015. Instructor: Prof. Menzie Chinn UW Madison
Economics 442 Macroeconomic Policy (Spring 2015) 3/23/2015 Instructor: Prof. Menzie Chinn UW Madison Outline Models of Investment Assessment Uncertainty http://www.bostonfed.org/economic/neer/neer2001/neer201a.pdf
More informationTesting the Stability of Demand for Money in Tonga
MPRA Munich Personal RePEc Archive Testing the Stability of Demand for Money in Tonga Saten Kumar and Billy Manoka University of the South Pacific, University of Papua New Guinea 12. June 2008 Online at
More informationThe Demand for Money in China: Evidence from Half a Century
International Journal of Business and Social Science Vol. 5, No. 1; September 214 The Demand for Money in China: Evidence from Half a Century Dr. Liaoliao Li Associate Professor Department of Business
More informationA new approach for measuring volatility of the exchange rate
Available online at www.sciencedirect.com Procedia Economics and Finance 1 ( 2012 ) 374 382 International Conference On Applied Economics (ICOAE) 2012 A new approach for measuring volatility of the exchange
More informationResponse of Output Fluctuations in Costa Rica to Exchange Rate Movements and Global Economic Conditions and Policy Implications
Response of Output Fluctuations in Costa Rica to Exchange Rate Movements and Global Economic Conditions and Policy Implications Yu Hsing (Corresponding author) Department of Management & Business Administration,
More informationIMPACT OF MACROECONOMIC VARIABLE ON STOCK MARKET RETURN AND ITS VOLATILITY
7 IMPACT OF MACROECONOMIC VARIABLE ON STOCK MARKET RETURN AND ITS VOLATILITY 7.1 Introduction: In the recent past, worldwide there have been certain changes in the economic policies of a no. of countries.
More informationVolume 29, Issue 2. Measuring the external risk in the United Kingdom. Estela Sáenz University of Zaragoza
Volume 9, Issue Measuring the external risk in the United Kingdom Estela Sáenz University of Zaragoza María Dolores Gadea University of Zaragoza Marcela Sabaté University of Zaragoza Abstract This paper
More informationREAL EXCHANGE RATES AND REAL INTEREST DIFFERENTIALS: THE CASE OF A TRANSITIONAL ECONOMY - CAMBODIA
business vol 12 no2 Update 2Feb_Layout 1 5/4/12 2:26 PM Page 101 International Journal of Business and Society, Vol. 12 No. 2, 2011, 101-108 REAL EXCHANGE RATES AND REAL INTEREST DIFFERENTIALS: THE CASE
More informationAN ANALYSIS OF THE DETERMINANTS OF THAILAND S EXPORTS AND IMPORTS WITH MAJOR TRADING PARTNERS
An Analysis of the Determinants of Thailand s Exports and Imports with Major Trading Partners AN ANALYSIS OF THE DETERMINANTS OF THAILAND S EXPORTS AND IMPORTS WITH MAJOR TRADING PARTNERS Komain Jiranyakul,
More informationcompetition for a country s exports at the global scene. Thus, in this situation, a successful real devaluation 2 can improve and enhance export earni
Estimating Export Equations for Developing Countries Sanjesh Kumar * The paper uses annual time series data to estimate the price and income elasticities of export demand for three developing countries
More informationAN EMPIRICAL ANALYSIS OF THE PUBLIC DEBT RELEVANCE TO THE ECONOMIC GROWTH OF THE USA
AN EMPIRICAL ANALYSIS OF THE PUBLIC DEBT RELEVANCE TO THE ECONOMIC GROWTH OF THE USA Petar Kurečić University North, Koprivnica, Trg Žarka Dolinara 1, Croatia petar.kurecic@unin.hr Marin Milković University
More informationFinancial Liberalization and Money Demand in Mauritius
Illinois State University ISU ReD: Research and edata Master's Theses - Economics Economics 5-8-2007 Financial Liberalization and Money Demand in Mauritius Rebecca Hodel Follow this and additional works
More informationThe effects of the real exchange rate on the trade balance: Is there a J-curve for Vietnam? A VAR approach.
MPRA Munich Personal RePEc Archive The effects of the real exchange rate on the trade balance: Is there a J-curve for Vietnam? A VAR approach. Hoang Khieu Van National Graduate Institute for Policy Studies,
More informationMODELLING AND PREDICTING THE REAL MONEY DEMAND IN ROMANIA. Literature review
MODELLING AND PREDICTING THE REAL MONEY DEMAND IN ROMANIA Elena PELINESCU, 61 Mihaela SIMIONESCU 6263 Abstract The main aim of this article is to model the quarterly real money demand in Romania and to
More informationFinancial Econometrics Series SWP 2011/13. Did the US Macroeconomic Conditions Affect Asian Stock Markets? S. Narayan and P.K.
Faculty of Business and Law School of Accounting, Economics and Finance Financial Econometrics Series SWP 2011/13 Did the US Macroeconomic Conditions Affect Asian Stock Markets? S. Narayan and P.K. Narayan
More informationThe Impacts of Financial Crisis on Pakistan Economy: An Empirical Approach
International Journal of Empirical Finance Vol. 4, No. 5, 2015, 258-269 The Impacts of Financial Crisis on Pakistan Economy: An Empirical Approach Khalid Mughal 1, Irfan Khan 2, Farhat Usman 3 Abstract
More informationAn Investigation of Effective Factors on Export in Iran
J. Basic. Appl. Sci. Res., 2(4)4092-4097, 2012 2012, TextRoad Publication ISSN 2090-4304 Journal of Basic and Applied Scientific Research www.textroad.com An Investigation of Effective Factors on Export
More informationThe Frequency of Wars*
The Frequency of Wars* Mark Harrison** Department of Economics and CAGE, University of Warwick Centre for Russian and East European Studies, University of Birmingham Hoover Institution, Stanford University
More informationCointegration Tests and the Long-Run Purchasing Power Parity: Examination of Six Currencies in Asia
Volume 23, Number 1, June 1998 Cointegration Tests and the Long-Run Purchasing Power Parity: Examination of Six Currencies in Asia Ananda Weliwita ** 2 The validity of the long-run purchasing power parity
More informationStructural change in the export demand function for Indonesia: Estimation, analysis and policy implications
Available online at www.sciencedirect.com Journal of Policy Modeling 31 (2009) 260 271 Structural change in the export demand function for Indonesia: Estimation, analysis and policy implications Akhand
More informationExchange Rate and Economic Growth in Indonesia ( )
Exchange Rate and Economic Growth in Indonesia (1984-2013) Name: Shanty Tindaon JEL : E47 Keywords: Economic Growth, FDI, Inflation, Indonesia Abstract: This paper examines the impact of FDI, capital stock,
More informationWhy the saving rate has been falling in Japan
October 2007 Why the saving rate has been falling in Japan Yoshiaki Azuma and Takeo Nakao Doshisha University Faculty of Economics Imadegawa Karasuma Kamigyo Kyoto 602-8580 Japan Doshisha University Working
More informationTrade deficit in Egypt: Is it can be controlled?
Advances in Management & Applied Economics, vol. 6, no. 6, 2016, 89-103 ISSN: 1792-7544 (print version), 1792-7552(online) Scienpress Ltd, 2016 Trade deficit in Egypt: Is it can be controlled? Mohamed
More informationMERIT-Infonomics Research Memorandum series
MERIT-Infonomics Research Memorandum series How to cure the trade balance? Reducing budget deficits versus devaluations in the presence of J- and W-curves for Brazil Thomas Ziesemer 2005-019 MERIT Maastricht
More information(CRAE) The Interaction Between Exchange Rates and Stock Prices: An Australian Context. Working Paper Series July
Centre for Research in Applied Economics (CRAE) Working Paper Series 2007-07 July The Interaction Between Exchange Rates and Stock Prices: An Australian Context By Noel Dilrukshan Richards, John Simpson
More informationThe Credit Cycle and the Business Cycle in the Economy of Turkey
Chinese Business Review, March 2016, Vol. 15, No. 3, 123-131 doi: 10.17265/1537-1506/2016.03.003 D DAVID PUBLISHING The Credit Cycle and the Business Cycle in the Economy of Turkey Şehnaz Bakır Yiğitbaş
More informationCURRENT ACCOUNT DEFICIT AND FISCAL DEFICIT A CASE STUDY OF INDIA
CURRENT ACCOUNT DEFICIT AND FISCAL DEFICIT A CASE STUDY OF INDIA Anuradha Agarwal Research Scholar, Dayalbagh Educational Institute, Agra, India Email: 121anuradhaagarwal@gmail.com ABSTRACT Purpose/originality/value:
More informationThe source of real and nominal exchange rate fluctuations in Thailand: Real shock or nominal shock
MPRA Munich Personal RePEc Archive The source of real and nominal exchange rate fluctuations in Thailand: Real shock or nominal shock Binh Le Thanh International University of Japan 15. August 2015 Online
More informationExport and Import Regressions on 2009Q1 preliminary release data Menzie Chinn, 23 June 2009 ( )
Export and Import Regressions on 2009Q1 preliminary release data Menzie Chinn, 23 June 2009 ( mchinn@lafollette.wisc.edu ) EXPORTS Nonagricultural real exports, regressand; Real Fed dollar broad index
More informationThe Economic Consequences of Dollar Appreciation for US Manufacturing Investment: A Time-Series Analysis
The Economic Consequences of Dollar Appreciation for US Manufacturing Investment: A Time-Series Analysis Robert A. Blecker Unpublished Appendix to Paper Forthcoming in the International Review of Applied
More informationEstimating the Relationship between the Current Account, the Capital Account and Investment for India
WP-2017-016 Estimating the Relationship between the Current Account, the Capital Account and Investment for India Ashima Goyal and Vaishnavi Sharma Indira Gandhi Institute of Development Research, Mumbai
More informationTHE IMPACT OF EXCHANGE RATE ON BALANCE OF PAYMENT: AN ECONOMETRIC INVESTIGATION ON SRI LANKA
THE IMPACT OF EXCHANGE RATE ON BALANCE OF PAYMENT: AN ECONOMETRIC INVESTIGATION ON SRI LANKA S. Priyatharsiny Department of Economics and Statistics, Faculty of Arts, University of Peradeniya, Sri Lanka
More informationIs Currency Depreciation Expansionary? The Case of South Korea
Journal of Advances in Economics and Finance, Vol. 1, No. 1, November 2016 https://dx.doi.org/10.22606/jaef.2016.11002 21 Is Currency Depreciation Expansionary? The Case of South Korea Yu Hsing 1 1 Department
More informationUnemployment and Labour Force Participation in Italy
MPRA Munich Personal RePEc Archive Unemployment and Labour Force Participation in Italy Francesco Nemore Università degli studi di Bari Aldo Moro 8 March 2018 Online at https://mpra.ub.uni-muenchen.de/85067/
More informationImpact of Exports and Imports on USD, EURO, GBP and JPY Exchange Rates in India
Impact of Exports and Imports on USD, EURO, GBP and JPY Exchange Rates in India Ms.SavinaA Rebello 1 1 M.E.S College of Arts and Commerce, (India) ABSTRACT The exchange rate has an effect on the trade
More informationCHAPTER V RELATION BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH DURING PRE AND POST LIBERALISATION PERIOD
CHAPTER V RELATION BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH DURING PRE AND POST LIBERALISATION PERIOD V..Introduction As far as India is concerned, financial sector reforms have made tremendous
More informationReal Exchange Rate Volatility and US Exports: An ARDL Bounds Testing Approach. Glauco De Vita and Andrew Abbott 1
Economic Issues, Vol. 9, Part 1, 2004 Real Exchange Rate Volatility and US Exports: An ARDL Bounds Testing Approach Glauco De Vita and Andrew Abbott 1 ABSTRACT This paper examines the impact of exchange
More informationBalance of payments and policies that affects its positioning in Nigeria
MPRA Munich Personal RePEc Archive Balance of payments and policies that affects its positioning in Nigeria Anulika Azubike Nnamdi Azikiwe University, Awka, Anambra State, Nigeria. 1 November 2016 Online
More informationTable 1. The Demand for International Reserves: Benchmark Specification (Constant, Log GNP, Import Share, Export Variability)
Table 1. The Demand for International Reserves: Benchmark Specification (Constant, Log GNP, Import Share, Export Variability) Import Export Period Constant Log GNP Share Variability Total -3.87 1.0 1.94-0.03
More informationEXCHANGE RATE AND TRADE BALANCE RELATIONSHIP: THE EXPERIENCE OF ASEAN COUNTRIES
EXCHANGE RATE AN TRAE BALANCE RELATIONSHI: THE EXERIENCE O ASEAN COUNTRIES Khim-Sen Liew a, Kian-ing Lim b and Huzaimi Hussain c a aculty of Economics and Management, Universiti utra Malaysia b Labuan
More informationThe Relationship between Inflation, Inflation Uncertainty and Output Growth in India
Economic Affairs 2014, 59(3) : 465-477 9 New Delhi Publishers WORKING PAPER 59(3): 2014: DOI 10.5958/0976-4666.2014.00014.X The Relationship between Inflation, Inflation Uncertainty and Output Growth in
More informationRE-EXAMINE THE INTER-LINKAGE BETWEEN ECONOMIC GROWTH AND INFLATION:EVIDENCE FROM INDIA
6 RE-EXAMINE THE INTER-LINKAGE BETWEEN ECONOMIC GROWTH AND INFLATION:EVIDENCE FROM INDIA Pratiti Singha 1 ABSTRACT The purpose of this study is to investigate the inter-linkage between economic growth
More informationDoes the J-Curve Phenomenon Exist in The Indonesia s Bilateral Trade Balances With Major Trading Countries?
Does the J-Curve Phenomenon Exist in The Indonesia s Bilateral Trade Balances With Major Trading Countries? Hapsari Adiningsih Graduate from Department of Economics, Faculty of Economics and Management,
More informationDeterminant of Balance of Trade: Case Study of Pakistan
European Journal of Scientific Research ISSN 1450-216X Vol.41 No.1 (2010), pp.13-20 EuroJournals Publishing, Inc. 2010 http://www.eurojournals.com/ejsr.htm Determinant of Balance of Trade: Case Study of
More informationMacro News and Exchange Rates in the BRICS. Guglielmo Maria Caporale, Fabio Spagnolo and Nicola Spagnolo. February 2016
Economics and Finance Working Paper Series Department of Economics and Finance Working Paper No. 16-04 Guglielmo Maria Caporale, Fabio Spagnolo and Nicola Spagnolo Macro News and Exchange Rates in the
More informationA stable demand for money despite financial crisis: The case of Venezuela
A stable demand for money despite financial crisis: The case of Venezuela Hilde C. Bjørnland* August 2004 Forthcoming in Applied Economics Abstract: This paper investigates the demand for broad money in
More informationImport s Price and Income Elasticity Estimates: Reconsidering the Evidence for Pakistan
Import s Price and Income Elasticity Estimates: Reconsidering the Evidence for Pakistan Saleem Khan, Rafaqet Ali and Mahmood Shah 1 Abstract: This paper largely explains for the price and income elasticity
More informationThe Equilibrium Real Exchange Rate: Evidence from Turkey
MPRA Munich Personal RePEc Archive The Equilibrium Real Exchange Rate: Evidence from Turkey C. Emre Alper and Ismail Saglam Bogazici University 1999 Online at http://mpra.ub.uni-muenchen.de/1924/ MPRA
More informationInvestigation of Relationship between Stock Prices, Interest Rate and Exchange Rate Fluctuations
Vol. 2 No. 4, 2014, 182-189 Investigation of Relationship between Stock Prices, Interest Rate and Exchange Rate Fluctuations Amir Haji Ahmadi 1, Tahmineh Sanei Emamgholi 2 Abstract One of the most important
More informationExchange Rate and Economic Performance - A Comparative Study of Developed and Developing Countries
IOSR Journal of Business and Management (IOSR-JBM) e-issn: 2278-487X. Volume 8, Issue 1 (Jan. - Feb. 2013), PP 116-121 Exchange Rate and Economic Performance - A Comparative Study of Developed and Developing
More informationAnswers to Questions: Chapter 7
Answers to Questions in Textbook 1 Answers to Questions: Chapter 7 1. Any international transaction that creates a payment of money to a U.S. resident generates a credit. Any international transaction
More informationEquilibrium Level of the Real Exchange Rate and the Duration and Magnitude of the Misalignments for Turkey
Loyola University Chicago Loyola ecommons Topics in Middle Eastern and North African Economies Quinlan School of Business 9-1-2000 Equilibrium Level of the Real Exchange Rate and the Duration and Magnitude
More informationExchange Rate Market Efficiency: Across and Within Countries
Exchange Rate Market Efficiency: Across and Within Countries Tammy A. Rapp and Subhash C. Sharma This paper utilizes cointegration testing and common-feature testing to investigate market efficiency among
More informationApplied Econometrics and International Development. AEID.Vol. 5-3 (2005)
PURCHASING POWER PARITY BASED ON CAPITAL ACCOUNT, EXCHANGE RATE VOLATILITY AND COINTEGRATION: EVIDENCE FROM SOME DEVELOPING COUNTRIES AHMED, Mudabber * Abstract One of the most important and recurrent
More informationLong-run Stability of Demand for Money in China with Consideration of Bilateral Currency Substitution
Long-run Stability of Demand for Money in China with Consideration of Bilateral Currency Substitution Yongqing Wang The Department of Business and Economics The University of Wisconsin-Sheboygan Sheboygan,
More informationA SIMULTANEOUS-EQUATION MODEL OF THE DETERMINANTS OF THE THAI BAHT/U.S. DOLLAR EXCHANGE RATE
A SIMULTANEOUS-EQUATION MODEL OF THE DETERMINANTS OF THE THAI BAHT/U.S. DOLLAR EXCHANGE RATE Yu Hsing, Southeastern Louisiana University ABSTRACT This paper examines short-run determinants of the Thai
More informationA causal relationship between foreign direct investment, economic growth and export for Central and Eastern Europe Zuzana Gallová 1
A causal relationship between foreign direct investment, economic growth and export for Central and Eastern Europe Zuzana Gallová 1 1 Introduction Abstract. Foreign direct investment is generally considered
More informationOLUGBENGA ONAFOWORA SUSQUEHANNA UNIVERSITY. Abstract
Exchange rate and trade balance in east asia: is there a J curve? OLUGBENGA ONAFOWORA SUSQUEHANNA UNIVERSITY Abstract This paper examines the short run and long run effects of real exchange rate changes
More informationRelationship between Inflation and Unemployment in India: Vector Error Correction Model Approach
Relationship between Inflation and Unemployment in India: Vector Error Correction Model Approach Anup Sinha 1 Assam University Abstract The purpose of this study is to investigate the relationship between
More informationIntegration of Foreign Exchange Markets: A Short Term Dynamics Analysis
Global Journal of Management and Business Studies. ISSN 2248-9878 Volume 3, Number 4 (2013), pp. 383-388 Research India Publications http://www.ripublication.com/gjmbs.htm Integration of Foreign Exchange
More informationEstimating a Monetary Policy Rule for India
MPRA Munich Personal RePEc Archive Estimating a Monetary Policy Rule for India Michael Hutchison and Rajeswari Sengupta and Nirvikar Singh University of California Santa Cruz 3. March 2010 Online at http://mpra.ub.uni-muenchen.de/21106/
More informationPAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS
PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS PIDE WORKING PAPERS No. 151 On Using Exchange Rate for Promoting Exports Atiq-ur-Rehman August 2017 PIDE Working Papers No. 151 On Using Exchange Rate for Promoting
More informationAsian Economic and Financial Review SOURCES OF EXCHANGE RATE FLUCTUATION IN VIETNAM: AN APPLICATION OF THE SVAR MODEL
Asian Economic and Financial Review ISSN(e): 2222-6737/ISSN(p): 2305-2147 journal homepage: http://www.aessweb.com/journals/5002 SOURCES OF EXCHANGE RATE FLUCTUATION IN VIETNAM: AN APPLICATION OF THE SVAR
More informationImpact of Devaluation on Trade Balance in Pakistan
Page 16 Oeconomics of Knowledge, Volume 3, Issue 3, 3Q, Summer 2011 Impact of Devaluation on Trade Balance in Pakistan Muhammad ASIF, Lecturer Management Sciences Department CIIT, Abbottabad, Pakistan
More informationForeign Direct Investment & Economic Growth in BRICS Economies: A Panel Data Analysis
Foreign Direct Investment & Economic Growth in BRICS Economies: A Panel Data Analysis Gaurav Agrawal The research paper is an attempt to examine the relationship between foreign direct investment (FDI)
More informationThe Effects of Public Debt on Economic Growth and Gross Investment in India: An Empirical Evidence
Volume 8, Issue 1, July 2015 The Effects of Public Debt on Economic Growth and Gross Investment in India: An Empirical Evidence Amanpreet Kaur Research Scholar, Punjab School of Economics, GNDU, Amritsar,
More informationEconomics Bulletin, 2013, Vol. 33 No. 3 pp
1. Introduction In an attempt to facilitate faster economic growth through greater economic cooperation and free trade, the last four decades have witnessed the formation of major trading blocs and memberships
More informationAFRREV IJAH, Vol.3 (1) January, 2014
AFRREV IJAH An International Journal of Arts and Humanities Bahir Dar, Ethiopia Vol. 3 (1), S/No 9, January, 2014: 145-159 ISSN: 2225-8590 (Print) ISSN 2227-5452 (Online) The Impact of Budget Deficit on
More informationAvailable online at ScienceDirect. Energy Procedia 75 (2015 )
Available online at www.sciencedirect.com ScienceDirect Energy Procedia 75 (2015 ) 2658 2664 The 7 th International Conference on Applied Energy ICAE2015 Impact of Energy Consumption, GDP & Fiscal Deficit
More informationCapital Flow Components and the Real Exchange Rate: Implications for India
International Journal of Business and Economics, 2015, Vol. 14, No. 2, 179-194 Capital Flow Components and the Real Exchange Rate: Implications for India Shashank Goel Indian Institute of Foreign Trade,
More informationThe views expressed in this Working Paper are those of the individual author(s) and do not necessarily represent the position of the Kenya School of
The views expressed in this Working Paper are those of the individual author(s) and do not necessarily represent the position of the Kenya School of Monetary Studies (KSMS) or KSMS policy. Working Papers
More informationDoes Exchange Rate Volatility Influence the Balancing Item in Japan? An Empirical Note. Tuck Cheong Tang
Pre-print version: Tang, Tuck Cheong. (00). "Does exchange rate volatility matter for the balancing item of balance of payments accounts in Japan? an empirical note". Rivista internazionale di scienze
More informationStock Prices, Foreign Exchange Reserves, and Interest Rates in Emerging and Developing Economies in Asia
International Journal of Business and Social Science Vol. 7, No. 9; September 2016 Stock Prices, Foreign Exchange Reserves, and Interest Rates in Emerging and Developing Economies in Asia Yutaka Kurihara
More informationInfluence of Macroeconomic Indicators on Mutual Funds Market in India
Influence of Macroeconomic Indicators on Mutual Funds Market in India KAVITA Research Scholar, Department of Commerce, Punjabi University, Patiala (India) DR. J.S. PASRICHA Professor, Department of Commerce,
More informationCOINTEGRATION AND MARKET EFFICIENCY: AN APPLICATION TO THE CANADIAN TREASURY BILL MARKET. Soo-Bin Park* Carleton University, Ottawa, Canada K1S 5B6
1 COINTEGRATION AND MARKET EFFICIENCY: AN APPLICATION TO THE CANADIAN TREASURY BILL MARKET Soo-Bin Park* Carleton University, Ottawa, Canada K1S 5B6 Abstract: In this study we examine if the spot and forward
More informationGOLD PRICE MOVEMENTS IN INDIA AND GLOBAL MARKET
53 GOLD PRICE MOVEMENTS IN INDIA AND GLOBAL MARKET Shaik Saleem, Research Scholar, Department of Management Studies, Sri Venkateswara University, Tirupati, Andhra Pradesh, India. Dr. M. Srinivasa Reddy,
More informationLinkage between Gold and Crude Oil Spot Markets in India-A Cointegration and Causality Analysis
Linkage between Gold and Crude Oil Spot Markets in India-A Cointegration and Causality Analysis Narinder Pal Singh Associate Professor Jagan Institute of Management Studies Rohini Sector -5, Delhi Sugandha
More informationForecasting Nominal Exchange Rate of Indian Rupee vs. US Dollar
Forecasting Nominal Exchange Rate of Indian Rupee vs. US Dollar Ajay Kumar Panda* In this paper the Theory of Flexible Price and Sticky Price Monetary model are empirically analyzed by using the Vector
More informationUnemployment and Labor Force Participation in Turkey
ERC Working Papers in Economics 15/02 January/ 2015 Unemployment and Labor Force Participation in Turkey Aysıt Tansel Department of Economics, Middle East Technical University, Ankara, Turkey and Institute
More informationSavings Investment Correlation in Developing Countries: A Challenge to the Coakley-Rocha Findings
Savings Investment Correlation in Developing Countries: A Challenge to the Coakley-Rocha Findings Abu N.M. Wahid Tennessee State University Abdullah M. Noman University of New Orleans Mohammad Salahuddin*
More informationSustainability of India s Current Account Deficit
Journal of International Economic Studies (2013), No.27, 77 91 2013 The Institute of Comparative Economic Studies, Hosei University Sustainability of India s Current Account Deficit Ramphul Ohlan Maharshi
More informationTHE CREDIT CYCLE and the BUSINESS CYCLE in the ECONOMY of TURKEY
810 September 2014 Istanbul, Turkey 442 THE CYCLE and the BUSINESS CYCLE in the ECONOMY of TURKEY Şehnaz Bakır Yiğitbaş 1 1 Dr. Lecturer, Çanakkale Onsekiz Mart University, TURKEY, sehnazbakir@comu.edu.tr
More informationVolume 35, Issue 1. Yu Hsing Southeastern Louisiana University
Volume 35, Issue 1 Short-Run Determinants of the USD/MYR Exchange Rate Yu Hsing Southeastern Louisiana University Abstract This paper examines short-run determinants of the U.S. dollar/malaysian ringgit
More informationSectoral Analysis of the Demand for Real Money Balances in Pakistan
The Pakistan Development Review 40 : 4 Part II (Winter 2001) pp. 953 966 Sectoral Analysis of the Demand for Real Money Balances in Pakistan ABDUL QAYYUM * 1. INTRODUCTION The main objective of monetary
More information