Global Journal of Human Social Science, E: Economics, Volume 22 Issue 2

Three normalised cointegrating equations are as follows. Table 10: Normalised equations Cointegrating Equation CointEq1 CointEq2 CointEq3 logy t-1 1.000000 0.000000 0.000000 logx 1t-1 0.000000 1.000000 0.000000 logx 2t-1 0.000000 0.000000 1.000000 logm 1t-1 -256.3150 -16.28028 20.42067 t [-8.88832]* [-8.13604]* [ 9.27763]* logm 2t-1 -85.46583 -6.110907 6.773430 t [-5.79156]* [-5.96780]* [ 6.01358]* logz t-1 353.3942 22.25599 -29.15125 t [ 8.37491]* [ 7.60104]* [-9.05106]* C -1519.563 -98.35036 126.7701 Source: Calculated by author Taking into account of the system equations, the cointegrating equations turned into the following forms. Cointegrating equation1=Z 1t-1 = -0.9194logy t-1 -256.3150logm 1t-1 -85.465logm 2t-1 +353.394z t-1 -1519.56 (-2.91)* (-8.88)* (-5.79)* (8.37)* Equation-2=Z 2t-1 =-0.1383logx 1t-1 -16.280logm 1t-1 -6.1109logm 2t-1 +22.255logz t-1 -98.350 (-2.13)* (-8.136)* (-5.96)* (7.60)* Equation-3=Z 3t-1 =-0.0520logx 2t-1 +20.4206logm 1t-1 +6.773logm 2t-1 -29.151logz t-1 +126.77 (-4.35)* (9.27)* (6.013)* (-9.05)* In the Figure 4, the cointegrating relationships have been plotted neatly. Source: Plotted by author Figure 4: Long run cointegrating relation Above all, the model consists of 6 imaginary roots, two negative roots and one root is less than one, two roots are greater than one and one root is unity respectively. Therefore, the model is non-stationary. Besides, one root lies on outside the unit circle and others lie inside the unit circle which are shown in the Figure 5 which confirms that the model is unstable. Volume XXII Issue II Version I 66 ( ) Global Journal of Human Social Science - Year 2022 © 2022 Global Journals E In the first cointegrating equation, it was established that there were long run causalities to US credits, grants and assistance to India from both imports of India and USA and from gross national income of USA during the Bretton Woods era significantly and since all t values of coefficients were significant and coefficient of logy t-1 was negative and significant, it means that the cointegrating equation moves to the equilibrium or convergent. In the same token, US export had significantly long run causal relationships from US and Indian imports and US gross national income and this equation tended to equilibrium. Similarly, US export had long run causal relations with US and Indian imports and US gross national income and the cointegrating equation was convergent. Determinants of U.S. Grants, Credits and Assistances to India during Bretton Woods