Macroeconomic Stability, Openness, and Economic Growth Nexus: an Insight from BRICS Countries

Umer Jeelanie Banday () and Ranjan Aneja ()
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Umer Jeelanie Banday: Indian Institute of Technology
Ranjan Aneja: Central University of Haryana

Journal of the Knowledge Economy, 2024, vol. 15, issue 2, No 38, 5965-5979

Abstract: Abstract The association between economic growth, trade openness, and macroeconomic stability resides to be one of the notable issues in both hypothetical and policy framework. Most of the empirical evidence has given mixed and indecisive results. This paper examines the impact of trade openness on economic growth and macroeconomic stability for BRICS countries over the period of 1990 to 2017, using pooled mean group ARDL model and Dumitrescu and Hurlin (2012) individual Wald causality analysis. Our findings reveal that openness positively impacts economic growth, inflation, and real effective exchange rate in the long run in all three models. However, other variables in the estimated model were also significant, but their coefficient was negative in the long run. The results of causality analysis find bidirectional causality between openness and economic growth, openness and inflation, and openness to the real effective exchange rate.

Keywords: Trade openness; Macroeconomic stability; Economic growth; ARDL; Causality (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-023-01241-9

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