Is Depreciation an Antecedent to Economic Growth? Indian Experience

Pillai, K R (2017) Is Depreciation an Antecedent to Economic Growth? Indian Experience. Journal of Contemporary Management Research, 11 (1). pp. 27-43.

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Abstract

The external value of a currency is a prominent indicator of a nation’s international competitiveness. That value may vary due to government intervention or market mechanism. A fall in the external value of a currency has the potential to fetch some market advantages. Economists hail a weaker currency on account of its likely impact on economic growth through enhanced exports and, thereby, propelling the domestic economic activities. The proposed paper makes a longitudinal attempt to examine the role of the debilitating Indian currency of the rate of growth of the country. The relevant data sets for the year 1970-71 to 2014-15 were analysed to discern the empirical relationship between these two macroeconomic indicators. The Indian Rupee has been subject to over 800% decline in its external value over this time frame. This study has empirically examined, how it has translated to the nation’s economic growth rate. Break up analysis has endeavoured to identify the theoretical robustness of the purported relationship in each period of analysis.

Item Type: Article
Uncontrolled Keywords: Exchange rate fluctuation, Exchange rate volatility, Depreciation, Devaluation, GDP, Economic growth, emerging Economy, India
Subjects: Management > MIM Manipal
Depositing User: MIM User
Date Deposited: 20 Jun 2017 04:34
Last Modified: 20 Jun 2017 04:34
URI: http://eprints.manipal.edu/id/eprint/149105

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