What is it about?
This study analysed the impact of few macroeconomic factors on these reserves. Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests were employed to check the stationarity of the variables on the time series data that were of annual frequency. It was found that all variables were co-integrated signalling long-run relationship. Error correction mechanism (ECM) was implemented to get short-run dynamics for which a negative relation was established for trade openness (TRDOP) which contradicts previous studies. The negative relationship of TRDOP with international reserves in India could be due to the outcome of sustained trade deficits of Indian balance of payments. The economic growth variable exhibits a positive relationship which is consistent with previous studies. All variables were found significant at a 5 per cent level. The ECM suggested the same results as its long-run counterpart.
Featured Image
Photo by Aaron Burden on Unsplash
Why is it important?
We defined the cause of sustained trade deficits of Indian balance of payments which was probably not defined in earlier studies.
Perspectives
This study is all about the behavior of Indian balance of payments and foreign trade.
Mohammad Kashif S
Read the Original
This page is a summary of: Factors Affecting International Reserves with Special Reference to India, Vision The Journal of Business Perspective, October 2017, SAGE Publications,
DOI: 10.1177/0972262917733157.
You can read the full text:
Resources
Factors Affecting International Reserves with Special Reference to India
The study analyses the impact of few macroeconomic factors on international reserves in India.
Factors Affecting International Reserves with Special Reference to India
The study analysed the impact of few macroeconomic factors on international reserves in India.
Contributors
The following have contributed to this page
