The Granger-Causality between Transportation and GDP: A Panel Data Approach

Mehmet Aldonat Beyzatlar (), Müge Karacal () and Ibrahim Hakan Yetkiner ()
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Mehmet Aldonat Beyzatlar: Department of Economics, Izmir University of Economics
Müge Karacal: Department of Economics, Izmir University of Economics

No 1203, Working Papers from Izmir University of Economics

Abstract: This study investigates the Granger-causality relationship between real per capita GDP and transportation of EU-15 countries using a panel data set covering the period 1970-2008. Our findings indicate that the dominant type of Granger-causality is bidirectional. Accordingly, we conclude that care must be paid in defining the dependent and independent variables when studying the relationship between transportation and income. Instances of one-way or no Granger-causality were found to correspond with countries with the lowest income per capita ranks in 1970 and/or in 2008, including Portugal, Greece and Italy. We speculate that bi-directional Granger causality between income and transportation is observed only after an economy has completed its transition in terms of economic development.

Keywords: Granger-causality; Transportation; Income (search for similar items in EconPapers)
JEL-codes: C23 O18 (search for similar items in EconPapers)
Date: 2012-02
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