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The export-led growth hypothesis for India: examining causality by a new approach in the time-frequency domain

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  • Aviral Kumar Tiwari
  • Alexander Ludwig

Abstract

The literature on the relationship between export and growth is inconsistent in its conclusions regarding the direction of causality. Most recent contributions argue that inconclusive results among studies are likely to be related to the instability of causal relationships over time or over frequencies. To unify these two aspects in one approach, we compute a time-varying Diebold-Yilmaz (2012) spillover measure for the relationship between output and growth at different frequency scales which are obtained from discrete wavelet transforms. Our results confirm the time and scale dependence of causalities between export and output growth in India in the period 1960 to 2011. This new methodological approach can also be applied to systems of more than two variables and thus shows an avenue to modelling the time and scale dependence of causalities between many other economic variables.

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  • Aviral Kumar Tiwari & Alexander Ludwig, 2014. "The export-led growth hypothesis for India: examining causality by a new approach in the time-frequency domain," Applied Economics Letters, Taylor & Francis Journals, vol. 21(18), pages 1297-1301, December.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:18:p:1297-1301
    DOI: 10.1080/13504851.2014.925045
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    1. Krueger, Anne O, 1980. "Trade Policy as an Input to Development," American Economic Review, American Economic Association, vol. 70(2), pages 288-292, May.
    2. Ramsey, J.B., 2002. "Wavelets in Economics and Finance: Past and Future," Working Papers 02-02, C.V. Starr Center for Applied Economics, New York University.
    3. Ramsey James B., 2002. "Wavelets in Economics and Finance: Past and Future," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 6(3), pages 1-29, November.
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    Cited by:

    1. Ayhan Orhan & Melek Emikönel & Murat Emikönel & Rui Alexandre Castanho, 2022. "Reflections of the “Export-Led Growth” or “Growth-Led Exports” Hypothesis on the Turkish Economy in the 1999–2021 Period," Economies, MDPI, vol. 10(11), pages 1-18, October.
    2. Sudeshna Ghosh & Tomiwa Sunday Adebayo, 2024. "The effect of world policy uncertainty and geopolitical risk factors on export-led growth for Japan: novel insights by wavelet local multiple correlation methods," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(4), pages 3605-3633, August.
    3. Xi, Zenglei & Yu, Jinxiu & Sun, Qingru & Zhao, Wenqi & Wang, He & Zhang, Shuo, 2023. "Measuring the multi-scale price transmission effects from crude oil to energy stocks: A cascaded view," International Review of Financial Analysis, Elsevier, vol. 90(C).
    4. Sun, Qingru & Gao, Xiangyun & An, Haizhong & Guo, Sui & Liu, Xueyong & Wang, Ze, 2021. "Which time-frequency domain dominates spillover in the Chinese energy stock market?," International Review of Financial Analysis, Elsevier, vol. 73(C).
    5. Sasa OBRADOVIĆ & Nemanja LOJANICA, 2019. "Export-Led Growth: Evidence from Post-Communist Serbia," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 131-145, June.

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