The Causal Relationship between Exports, Imports and Economic Growth in Palestine

Islam Hassouneh () and Zahra' Fannoun
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Islam Hassouneh: College of Administrative Science and Informatics, Palestine Polytechnic University (PPU), P.O. Box 198, Abu Ruman, Hebron, Palestine

Journal of Reviews on Global Economics, 2019, vol. 8, 258-268

Abstract: The relationship between exports, imports and economic growth is investigated for the Palestinian economy over the period 2000-2018, using quarterly data. To do so, cointegration test using Johansen's approach as well as vector error correction technique are used. Findings confirm the presence of long-run equilibrium relationship between exports, imports and output growth. Results also support the existence of bidirectional long-run causality between exports, imports and output growth. As for the short-run causality, findings support both the export-led import and the import-led export hypotheses. Further, imports are found to Granger cause economic growth. Policy makers should be aware of the importance of trade to stimulate economic growth.

Keywords: Exports; imports; economic growth; cointegration; VECM. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:lif:jrgelg:v:8:y:2019:p:258-268

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