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Final Consumption and Foreign Trade for Romania and European Union – A Granger causality-based analysis

Author

Listed:
  • Păunică Mihai

    (Bucharest University of Economic Studies, Bucharest, Romania)

  • Manole Alexandru

    (“ARTIFEX” University of Bucharest, Bucharest, Romania)

  • Motofei Cătălina

    (Bucharest University of Economic Studies, Bucharest, Romania)

  • Tănase Gabriela-Lidia

    (Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

In this paper, the authors seek to analyze if the relationship between final consumption and foreign trade indicators, at a macroeconomic level, manifests as a Granger causality. The graphical representation of the datasets reveals that the evolutions follow a similar pattern (with the exception of the net export). The indicators on both sides of the causality have been widely approached by researchers, as they contribute to the formation of the Gross Domestic Product. The research methodology follows the Toda-Yamamoto procedure for measurement of Granger causality, as the variables were expected to be (and were found to be in the initial step of the data analysis) non-stationary, and the results on the processing in levels can provide more accurate information. The research hypotheses were designed in order to detail the main topic of the paper on foreign trade indicators. None of the hypotheses has been validated, and the authors consider, in the future, the application of other methods to assess the quantitative side of the links between foreign trade and final consumption. The authors consider that a significant contribution brought by this study is the type of data analysis method applied and the approach towards the two macroeconomic components of the economy, for the cases of Romania and the entire European Union, of which Romania is a member.

Suggested Citation

  • Păunică Mihai & Manole Alexandru & Motofei Cătălina & Tănase Gabriela-Lidia, 2021. "Final Consumption and Foreign Trade for Romania and European Union – A Granger causality-based analysis," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 15(1), pages 838-848, December.
    • Handle: RePEc:vrs:poicbe:v:15:y:2021:i:1:p:838-848:n:40
    DOI: 10.2478/picbe-2021-0077
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    References listed on IDEAS

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