Academic journal article IUP Journal of Applied Economics

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Academic journal article IUP Journal of Applied Economics

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Article excerpt

The present issue contains four research papers. In the first paper, "Dynamics of India-China Trade Relations: Testing for the Validity of Marshall-Lerner Condition and J-Curve Hypothesis", the authors, Bibekananda Panda and D Rama Krishna Reddy, have attempted to provide empirical insights on whether real depreciation of Indian rupee is an effective way of improving the trade deficit of India for the period 1987-2014 using Bounds test to cointegration approach that is based on Autoregressive Distributed Lag (ARDL) model and error correction of ARDL model. The authors opine that there is evidence for long-run relationship between trade balance, domestic income, foreign income and real exchange rate, while the estimated long-run ARDL model rejects the validity of Marshall-Lerner condition for Indian economy. The study reveals that short-term dynamics obtained from the estimation of error correction model showed that there is no J-Curve effect for India. The study highlights that given the inelastic nature of Indian trade basket, depreciation seems to be an unsuccessful attempt to correct trade balance with China.

In the second paper, "The Relationship Between Fiscal Deficit and Trade Deficit in India: An Empirical Enquiry Using Time Series Data", the authors, T Rajasekar and Malabika Deo, have attempted to evaluate the long-run relationship and causality between trade deficit and fiscal deficit for the period 1980-2014 using unit root, cointegration, error correction model and Granger causality tests. The study reveals that there exists long-run relationship and causality between trade deficit, fiscal deficit and other macroeconomic variables. The study highlights that fiscal deficit and macroeconomic factors have a cointegrating relationship with trade deficit and serious attention should be given to decreasing the trade deficit and fiscal deficit of India in the future.

In the third paper, "Asymmetric Volatility Transmission Between Home Foreclosures, Housing Prices, Unemployment Rate and Adjustable Mortgage Rates", the authors, Emmanuel Anoruo and Muhammad Mustafa, have made an attempt to investigate the volatility spillovers between home foreclosures, adjustable mortgage rates, housing prices and unemployment rates for the US for the period 1987Q1 to 2008Q4 using modified Dickey-Fuller unit root test and EGARCH model. …

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