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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Hsing Yu & Hsieh Wen-jen, 2017. "Is Real Depreciation or Rising Government Debt Contractionary in India? A Simultaneous-Equation Model," Global Economy Journal, De Gruyter, vol. 17(2), pages 1-6, June.
    • Handle: RePEc:bpj:glecon:v:13:y:2017:i:1:p:6:n:7
    DOI: 10.1515/gej-2017-0010
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    currency depreciation; government debt; oil prices; stock prices; expected inflation rate;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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