Foreign Exchange Reserves and India’s Import Demand: A Cointegration and Vector Error Correction Analysis

Foreign Exchange Reserves Demand Model Based on Chinese Government Utility Maximization and Analysis of Chinese Foreign Exchange Reserves

At the end of 2010 China’s foreign exchange reserve reached $2847.34 billion, the author designs the maximum government utility function when consider the China government buys a part foreign exchange if company earns, it means that the China government will increase Ren-Min-Bi Yuan. And it will cause inflation. The inflation will cause disutility to government. Finally it gets the optimal fuct...

Cointegration and Error Correction

1 The Background Elementary courses in statistics introduce at an early stage the key assumption of “random sampling”. In more technical language, the data set is assumed to be identically and independently distributed (i.i.d.). In this framework a range of simple and elegant results can be derived, for example, that the variance of the mean of n observations is 1/n times the variance of the ob...

An Aggregate Import Demand Function for India: A Cointegration Analysis

This paper investigates the behaviour of Indian aggregate imports during the period 1971-1995. In our empirical analysis of the aggregate import demand function for India, cointegration and error correction modelling approaches have been used. In the aggregate import demand function for India, import volume is found to be cointegrated with relative import price and real GDP. Our econometric est...

A Comparison of Threshold Cointegration and Markov-Switching Vector Error Correction Models in Price Transmission Analysis

An Empirical Analysis of China’s International Reserves Demand Function

The study aims to estimate an international reserves demand model for China using economic growth, propensity to import, real effective exchange rate and trade openness variables for quarterly period spanning from 1985Q1 to 2014Q4.The bounds testing technique to cointegration is used to test for a long run relationship, while the autoregressive distributed lag approach is used to estimate short...