Modelling the Dynamic Linkage Amidst Energy Prices and Twin Deficit in India: Empirical Investigation within Linear and Nonlinear Framework

Energy and electricity are critical prerequisites for every nation components of social economic growth. The monetary policy economist has been debating the issue relying on core inflation or headline inflation, which includes energy, because energy price is so volatile that it obscures trend in dilutes objectives policy. This paper aims at analyzing impact twin deficit within a linear nonlinear framework India using time series data covering period from 1971 to 2021. ARDL NARDL approaches employed investigate linear/symmetric response due twin-deficit India. Estimates show negative relationship between symmetric model. results asymmetric model reveal expansionary fiscal (increment CFD) contractionary (decline diverse, terms size coefficient. Further, estimates distinct increases decreases CAD inflation. study offers several implications policymakers economists.