IMPACT OF CURRENT ACCOUNT IMBALANCE ON UNEMPLOYMENT

2020 International journal of business, management and allied sciences  
This paper tries to explore the effects of current account deficit on the prevalent unemployment that affects the development of the Indian economy. A widening in the current account imbalance and rising unemployment in recent times makes the analysis of these factors significant .Thus using the analytical framework of a bivariate Granger Causality test in a Vector Autoregressive(VAR) model, from the year 1991 to 2018, it attempts to find out if there is a significant two way relationship
more » ... n the variables Current account balance(in current $US) and Unemployment (measured as a percentage of total labour force) .It also performs the Johansen's Test for Cointegration in a Vector Error Correction Model(VECM) to test for long run relationship between the said variables. Further, this paper also suggests policy measures necessary for ameliorating the conditions of the impoverished and for holistic growth of the country.
doi:10.33329/ijbmas.7.1.47 fatcat:4lxhoiasdzdszf64vgceb27xw4