ELG hypothesis is valid for India: An Evidence from Structural Causality

Zahid Asghar

MPRA Paper from University Library of Munich, Germany

Abstract: Causality is important for empirical analysis in economics but not easily detected. Therefore, it is always important that one should investigate the problem not only on statistical grounds but also add extra statistical information which may come from economic events happening over a time about the problem under study. This extra statistical information helps in introducing asymmetry in the relationship. Most of the studies are based on Granger Causality for determining causal direction between export and economic growth for individual countries. In this paper we use a method suggested by Hoover (2001) for detecting causality which incorporates extra statistical information, economic theory and statistical analysis. We apply this technique to a simulated data and also apply it to the export-led growth hypothesis for India. Our results indicate that there is unidirectional causality from export to economic growth.

Keywords: Structural Causality; Conditional and Marginal probability distributions; Granger Causality; Export Led Economic Growth (search for similar items in EconPapers)
JEL-codes: C01 E00 (search for similar items in EconPapers)
Date: 2009-07-27
New Economics Papers: this item is included in nep-cwa
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