The Relationship Between Exchange Rate And Government Expenditure On Economic Growth In China, India And Brazil

• Main Author: Lim, Boon Feng
• Format: Final Year Project Report
• Language: English
• Published: Universiti Malaysia Sarawak (UNIMAS) 2014
• Subjects: HB Economic Theory
• Online Access: http://ir.unimas.my/id/eprint/24762/5/Lim%20Boon%20Feng%20ft.pdf; http://ir.unimas.my/id/eprint/24762/

This study investigates the relationship between exchange rate and government expenditure on economic growth in China, India and Brazil. Using annual data of real gross domestic product, exchange rate and government expenditure spanning from 1960 till 2010 is utilized for stationary test. This study found that seri es data are stationary in first differences for China, India and Brazil. Besides that, this study found cointegration between vati ables for Brazil and India. Howevcr, there existed one to one relationship for China. On the other hand, the government policy or expenditure decide the effectiveness of aid in economic growth and exchange rate appreciation or depreciation. The relative significance of the variable is important for the policymakers to improve the conditions to enhance the economic growth.