Nexus between Indian Economic Growth and Financial Development: A Non-Linear ARDL Approach

• 발행기관: 한국유통과학회
• 저자명: Kundan KUMAR Rajendra Narayan PARAMANIK
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.6, 109~116쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.06.30

영문 초록

The study examines the nexus between financial development and economic growth in India during Q1: 1996 to Q3: 2018. This study employs time-series data of real GDP and ratio of broad money to GDP as a proxy for economic and financial development, respectively. The data are obtained from RBI database on the Indian economy. All variables are seasonally adjusted using X12-arima technique and expressed in natural logarithm form. Non-linear Autoregressive Distributed Lag (NARDL) bound test has been used to check for cointegrating relationship of these two variables. Empiical findings suggest that, unlike in the short run, in the long run financial development does impact economic growth positively. Further, a symmetric effect of positive and negative components of financial development is found for the Indian economy, whereas the effect of control variable like exchange rate and trade openness is in consonance with common economic intuition. Exchange rate is in consonance with intuitive economic logic that a fall in exchange rate makes exports cheaper and increases the quantity of export, which improves the balance of payment and leads to a rise in aggregate demand, hence improves economic growth. This paper contributes to the existing literature on India by breaking down financial indicator into positive and negative components to examine the finance-growth relationship.

목차

1. Introduction

2. Literature Review

3. Model Specification and Data Description

4. Econometric Methodology and Empirical Results

5. Conclusion

References

키워드

Financial Development Economic Growth NARDL India