Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105751
Authors: 
Razmi, Arslan
Year of Publication: 
2005
Series/Report no.: 
Working Paper, University of Massachusetts, Department of Economics 2005-05
Abstract: 
This study applies the Balance of Payments Constrained Growth (BPCG) model to India, a large developing country with a relatively low trade to GDP ratio. Rather than assuming similar elasticities of substitution between goods produced in different regions, the study extends the model to relax these assumptions. Johansen’s cointegration technique is employed to estimate trade parameters. Short-run adjustments are explored within a vector error correction framework. The average growth rates predicted by various forms of the BPCG hypothesis are found to be close to the actual average growth rate over the period 1950-1999, although individual decades display substantial deviations. JEL Categories: F43, F14, E12
Subjects: 
Balance of payments-related constraints
real exchange rates
Johansen’s cointegration technique
strong form
weak form
trade multiplier
import compression
Document Type: 
Working Paper

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