The sustainability of India's current account

Mark J. Holmes · Theodore Panagiotidis · Abhijit Sharma

46 citations0/0 files storedApplied Economics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Global Financial Crisis and Policies Monetary Policy and Economic Impact Economic Theory and Policy

Abstract

This study conducts an investigation into the sustainability of the Indian current account using data for 1950 onwards. A necessary condition for current account sustainability is that exports and imports are cointegrated. After testing for unit roots that allow for a structural break, we employ parametric tests for cointegration: based on Johansen (1995 Johansen, S. 1995. Likelihood-Based Inference in Cointegrated Vector Autoregressive Models, Oxford: Oxford University Press. [Crossref] , [Google Scholar]) and Saikkonen and Lütkepohl (2000a Saikkonen, P and Lütkepohl, H. 2000a. Testing for the cointegrating rank of a VAR process with an intercept. Econometric Theory, 16: 373–406. [Crossref], [Web of Science ®] , [Google Scholar], b Saikkonen, P and Lütkepohl, H. 2000b. Testing for the cointegrating rank of a VAR process with structural shifts. Journal of Business and Economic Statistics, 18: 451–64. [Taylor & Francis Online], [Web of Science ®] , [Google Scholar], c Saikkonen, P and Lütkepohl, H. 2000c. Trend adjustment prior to testing for the cointegrating rank of a vector autoregressive process. Journal of Time Series Analysis, 21: 435–56. [Crossref], [Web of Science ®] , [Google Scholar]) as well as the nonparametric procedure proposed by Breitung (2002 Breitung, J. 2002. Nonparametric tests for unit roots and cointegration. Journal of Econometrics, 108: 343–63. [Crossref], [Web of Science ®] , [Google Scholar]) and Breitung and Taylor (2003 Breitung, J and Taylor, AMR. 2003. Corrigendum to ‘nonparametric tests for unit roots and cointegration’. Journal of Econometrics, 117: 401–4. [Crossref] , [Google Scholar]) that does not assume linearity. By employing these procedures recursively, two distinct regimes are identified characterized by whether or not imports and exports are cointegrated. The regime of noncointegration runs until the late 1990s and the second regime of cointegration is present after that. This latter regime coincides with the liberalization of the Indian economy.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 46 citations exist upstream.

References

2002Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis 1995Likelihood-Based Inference in Cointegrated Vector Autoregressive Models 1996Numerical distribution functions for unit root and cointegration tests 1992Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis 2004Applied Time Series Econometrics 1991Testing Intertemporal Budget Constraints: Theory and Applications to U. S. Federal Budget and Current Account Deficits 1999Some tests for parameter constancy in cointegrated VAR‐models 2002Nonparametric tests for unit roots and cointegration

Cited by

2019Explaining India’s current account deficit: a time series perspective 2017Drivers of India’s current account deficits, with implications for ameliorating them

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.