Impact of Trade Openness on Output Growth: Co integration and Error Correction Model Approach
This study analyzed the long run relationship between trade openness and output growth for Pakistan using annual time series data for 1972-2010. This study follows the Engle and Granger co integration analysis and error correction approach to analyze the long run relationship between the two variab...
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| Format: | Article |
| Language: | English |
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EconJournals
2012-09-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/277 |
| _version_ | 1797921272345133056 |
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| author | Asma Arif Hasnat Ahmad |
| author_facet | Asma Arif Hasnat Ahmad |
| author_sort | Asma Arif |
| collection | DOAJ |
| description |
This study analyzed the long run relationship between trade openness and output growth for Pakistan using annual time series data for 1972-2010. This study follows the Engle and Granger co integration analysis and error correction approach to analyze the long run relationship between the two variables. The Error Correction Term (ECT) for output growth and trade openness is significant at 5% level of significance and indicates a positive long run relation between the variables. This study has also analyzed the causality between trade openness and output growth by using granger causality test. The results of granger causality show that there is a bi-directional significant relationship between trade openness and economic growth.
Keywords: Trade openness; output growth; cointegration; error correction model
JEL Classifications: F00; F1
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| first_indexed | 2024-04-10T14:14:51Z |
| format | Article |
| id | doaj.art-e30443e5b84c4776b30ed79700607721 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T14:14:51Z |
| publishDate | 2012-09-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-e30443e5b84c4776b30ed797006077212023-02-15T16:09:37ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382012-09-0124Impact of Trade Openness on Output Growth: Co integration and Error Correction Model ApproachAsma Arif0Hasnat Ahmad1University of WahCurtin University This study analyzed the long run relationship between trade openness and output growth for Pakistan using annual time series data for 1972-2010. This study follows the Engle and Granger co integration analysis and error correction approach to analyze the long run relationship between the two variables. The Error Correction Term (ECT) for output growth and trade openness is significant at 5% level of significance and indicates a positive long run relation between the variables. This study has also analyzed the causality between trade openness and output growth by using granger causality test. The results of granger causality show that there is a bi-directional significant relationship between trade openness and economic growth. Keywords: Trade openness; output growth; cointegration; error correction model JEL Classifications: F00; F1 https://econjournals.com/index.php/ijefi/article/view/277 |
| spellingShingle | Asma Arif Hasnat Ahmad Impact of Trade Openness on Output Growth: Co integration and Error Correction Model Approach International Journal of Economics and Financial Issues |
| title | Impact of Trade Openness on Output Growth: Co integration and Error Correction Model Approach |
| title_full | Impact of Trade Openness on Output Growth: Co integration and Error Correction Model Approach |
| title_fullStr | Impact of Trade Openness on Output Growth: Co integration and Error Correction Model Approach |
| title_full_unstemmed | Impact of Trade Openness on Output Growth: Co integration and Error Correction Model Approach |
| title_short | Impact of Trade Openness on Output Growth: Co integration and Error Correction Model Approach |
| title_sort | impact of trade openness on output growth co integration and error correction model approach |
| url | https://econjournals.com/index.php/ijefi/article/view/277 |
| work_keys_str_mv | AT asmaarif impactoftradeopennessonoutputgrowthcointegrationanderrorcorrectionmodelapproach AT hasnatahmad impactoftradeopennessonoutputgrowthcointegrationanderrorcorrectionmodelapproach |