Does Informality and Trade Openness Impact Long Run Growth? Empirical Evidence from Ghana

Charles Mawusi

Economics Bulletin, 2021, vol. 41, issue 1, 28-40

Abstract: Using an Autoregressive Distributed Lag (ARDL) technique, and the Granger causality test, this paper examines the dynamic relationship between economic growth, the size of the informal economy, and trade openness in Ghana. Our results provide evidence of a positive and bidirectional causality between the size of the informal economy and economic growth. Moreover, we find that openness to trade has a significant causal effect on the prevalence of informal activities and economic growth.

Keywords: Informality; Economic growth; Trade; Autoregressive Distributed Lag (ARDL); Cointegration (search for similar items in EconPapers)
JEL-codes: A1 O5 (search for similar items in EconPapers)
Date: 2021-03-10
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