Estimates of Trade Mis-invoicing and Their Macroeconomic Outcomes for the Indian Economy
Raghbendra Jha () and
Duc Nguyen Truong ()
Additional contact information
Duc Nguyen Truong: Arndt-Corden Department of Economics, College of Asia and the Pacific, Coombs Building (09), Australian National University, Acton, ACT 2601, Australia
Review of Economics & Finance, 2015, vol. 5, 19-34
This paper has two main objectives. First, it computes capital flight (CF) through trade mis-invoicing from India for the period 1988-2012. India¡¯s trade with 17 major trading partners is considered. We find that CF has accelerated since 2004 and particularly sharply since 2007. It peaked at nearly $40 billion in 2008 with the total outflow between 1988 and 2012 exceeding $186 billion. Second, we model the mutual dependence of GDP growth, CF, and various risk factors in a VAR framework. We find that, if left undisturbed, CF through trade mis-invoicing will continue to be high and play a significant and, by its very nature, an uncontrollable macroeconomic role. Hence, reducing, if not eliminating CF, is essential for its own sake as well as for the proper conduct of macroeconomic policy.
Keywords: Trade Mis-invoicing; VAR; Impulse Response; Forecasting; India (search for similar items in EconPapers)
JEL-codes: E17 F32 F47 K42 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bap:journl:150202
Ordering information: This journal article can be ordered from
17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada
Access Statistics for this article
Review of Economics & Finance is currently edited by H. Carlson
More articles in Review of Economics & Finance from Better Advances Press, Canada 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada.
Series data maintained by Carlson ().