Is Real Depreciation or Rising Government Debt Contractionary in India? A Simultaneous-Equation Model

Hsing Yu and Hsieh Wen-jen ()
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Hsing Yu: Joseph H. Miller Endowed Professorship in Business, Department of Management & Business Administration, College of Business, Southeastern Louisiana University, Hammond, LA 70402, USA
Hsieh Wen-jen: Department of Economics, National Cheng-Kung University, Tainan City70101, Taiwan

Global Economy Journal, 2017, vol. 17, issue 2, 6

Abstract: Based on a sample during 1978–2014, this paper finds that India’s real GDP has a positive relationship with real depreciation during 1978–2002, the government debt/GDP ratio, the real stock price, the growth rate of U.S. real GDP, and a negative relationship with real depreciation during 2003–2014, the real lending rate and the expected inflation rate. Therefore, the stage of economic development may play an important role in deciding whether real depreciation or real appreciation may promote economic growth.

Keywords: currency depreciation; government debt; oil prices; stock prices; expected inflation rate (search for similar items in EconPapers)
JEL-codes: E62 F31 F41 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1515/gej-2017-0010

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