An Econometric Analysis of Impact of Public Issue on Economic Development in India during 1989-2009

This paper examines the empirical association between public issue and economic development (GDP) during the period 1989-2009. With help of log-lin regression model, we found that public issue had a positive significant impact on India’s economic development during this period, which survives almost all diagnostic tests of Classical Linear Regression Model. But, the relationship between public issue and economic development during this period, though had drastically undergone a structural change after 1997 South-east Asian Crisis, evidenced by residuals of recursive least squares, CUSUM test, CUSUMSQ test and Chow’s Predictive Failure test, but had remained stable after 2007 Subprime Crisis.