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

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  • Umer Jeelanie Banday

    (Indian Institute of Technology)

  • Ranjan Aneja

    (Central University of Haryana)

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.

Suggested Citation

  • Umer Jeelanie Banday & Ranjan Aneja, 2024. "Macroeconomic Stability, Openness, and Economic Growth Nexus: an Insight from BRICS Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 5965-5979, June.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:2:d:10.1007_s13132-023-01241-9
    DOI: 10.1007/s13132-023-01241-9
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