Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245332 
Year of Publication: 
2020
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 8 [Issue:] 1 [Publisher:] Taylor & Francis [Place:] Abingdon [Year:] 2020 [Pages:] 1-26
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This paper investigates the long-run equilibrium relationship between economic growth and trade openness in India during the period 1960-2018 using the asymmetric error-correction model with threshold cointegration. To evaluate the robustness impact of trade openness on economic growth under different regimes, we divide the full sample period into two sub-periods, i.e., pre-trade reforms period 1960-1990, and post-trade reforms period 1991-2018. The study indeed confirms the evidence of asymmetric cointegration between economic growth and trade openness in India during the period under evaluation and over the different sub-periods. The estimated asymmetric error-correction model exhibits a different speed of adjustment in trade openness in response to positive and negative economic growth shocks in the short-run. More specifically, during the pre-reforms period, deviations from the long-run equilibrium due to a relative increase in economic growth have a lower speed of adjustment in comparison to deviations caused by a corresponding decrease in economic growth in India.
Subjects: 
economic growth
trade openness
threshold cointegration
error correctionmechanism
JEL: 
C32
F62
O47
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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