DEVALUATION, LIBERALIZATION AND STRUCTURAL LINKAGES BETWEEN INDIA FOREIGN-TRADE AND NATIONAL-INCOME

The structural links between a developing country's foreign trade sect or and its domestic economy have a crucial bearing on the results like ly to be achieved by trade liberalisation and currency devaluation. Th ese links are often overlooked. This paper provides a macro model of t he Indian economy based on a specification of the structural linkages among GDP, exports and imports, using data for the period 1973-89, and tries a identify the repercussions of trade and exchange rate policy changes on the trade deficit and GNP.