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The export-income relationship: the case of India

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  • P. J. Dawson

    (School of Agriculture, Food and Rural Development, University of Newcastle upon Tyne NE1 7RU, UK, P.J.Dawson@ncl.ac.uk)

Abstract

Export promotion has been central to India’s export-import policies since the late 1990s and exports are seen as a potential engine of growth. This paper examines India’s export-income relationship for 1950-99 using vector autoregressive models. Results show no cointegrating long-run relationship but Granger-causality tests and impulse responses indicate short-run feedback: a 1% increase in exports (income) leads to a 0.06% (0.35%) increase in income (exports) in the following year and these effects are long-lived. Export promotion policies appear justified.

Suggested Citation

  • P. J. Dawson, 2005. "The export-income relationship: the case of India," Progress in Development Studies, , vol. 5(1), pages 16-29, January.
    • Handle: RePEc:sae:prodev:v:5:y:2005:i:1:p:16-29
    DOI: 10.1191/1464993405ps098oa
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