Is trade deficit sustainable in India? An inquiry

Tiwari, Aviral (2010): Is trade deficit sustainable in India? An inquiry.

Abstract

This study examines the sustainability of trade deficit with allowance of structural breaks and seasonal adjustments as both variables have been subject to structural changes and affected by seasons. We find that, in all the cases, there is long run relationship between export and import. This implies that foreign trade deficit is sustainable in the Indian context.

• Item Type: MPRA Paper
• Language: English
• Keywords: export, import, unit root, structural breaks, seasonal adjustment, cointegration.
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes

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