Dynamics of globalization effect in India

Abstract

As India steps in the fourth decade of globalization, we can look at the fruits of globalization more objectively. The relationship of globalization with growth is much more complex with economies opting for protectionism. The aim of the paper is to identify the pace of globalization in the Indian economy by capturing the portion of economic growth explained by foreign factors. The factor‐induced domestic and foreign factor loadings are used in the time‐varying estimations to suggest the evidence of slowbalization in India. The models supplemented with stochastic volatility help in examining the structural changes in the economy.