econometrics

CAUSAL RELATIONSHIP BETWEEN SAVINGS AND ECONOMIC GROWTH IN INDIA

This paper examines empirically causal relationship between real gross domestic product (GDP) and real gross domestic saving (GDS) for India. The controversy surrounding the direction of causality between saving and economic growth is motivated in this study. The researcher has employed the Granger-causality techniques to analyze the causal relationship between saving and economic growth in India during the period 1951- 2011. The granger causality test reveals that there is no evidence of causality in any direction between per capita GDP and per capital saving.