Bipasha  Maity, 
    Test of Causality Between Two Macro Variables:
A Case of India,
    International Business Management,
    Volume 10,Issue 19,
    2016,
    Pages 4653-4658,
    ISSN 1993-5250,
    ibm.2016.4653.4658,
    (https://makhillpublications.co/view-article.php?doi=ibm.2016.4653.4658)
    Abstract: There are a plenty of research attempted to capture the causal relationship between GDP and Government Expenditures (GE). Since, the direction of causal relationship between these two macro variables is still inconclusive, I have taken a modest attempt to test a few hypotheses with respect to the relationship in question through this research. I gathered data on GDP and GE over a period 1960-2014 and fit the Vector Autoregressive (VAR) and Vector Error-Correction (VEC) models to data. Out of three hypotheses, one is confirmed that is GE Granger causes GDP of India. Policy makers/managers would get insight from the findings of this research to formulate better public policy/business strategy.
    Keywords: Causality;VECM;VAR;GDP;GE