Bilateral Trade and Economic Growth: The Empirical Evidence Between U.S. and South Korea

Hyunsoo Kang and P. Lynn Kennedy

Journal of Rural Development/Nongchon-Gyeongje, 2009, vol. 32, issue 2, 30

Abstract: This paper analyzes the relationships between bilateral trade and economic growth in the U.S. and Korean economies. Using quarterly data from 1990 to 2008, the theoretical procedures utilize Ordinary Least Square (OLS) and Seemingly Unrelated Regression (SUR) models under the static model assumption, an Impulse Response Function (IRF) and Forecast Error Variation Decomposition (FEVD) under the Vector Autoregressive (VAR) model, and Granger causality tests. Empirical results indicate a causal relationship between bilateral export growth and economic growth for the U.S. and Korean economies. The export-led growth (ELG) hypothesis is strongly supported by the results of Granger causality tests on Korean exports.

Keywords: International Relations/Trade; Political Economy; Production Economics (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jordng:90684

DOI: 10.22004/ag.econ.90684

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