Export-Led Growth or Growth-Driven Exports? The Canadian Case

Irene Henriques and Perry Sadorsky

Canadian Journal of Economics, 1996, vol. 29, issue 3, 540-55

Abstract: In this paper, the authors investigate the export-led growth hypothesis for Canada by constructing a vector autoregression in order to test for Granger causality between the following variables: real Canadian exports, real Canadian GDP, and real Canadian terms of trade. Two principal results emerge from the authors' research. First, real Canadian exports, real Canadian terms of trade, and real Canadian GDP are cointegrated. This implies that there exists a long-run steady state among these three variables. Second, the authors find evidence that a one-way Granger causal relationship exists in Canada whereby changes in GDP precede changes in exports.

Date: 1996
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