This paper, investigates causal relationships among agriculture, manufacturing and export in Tanzania by using time series data for the period between 1970 and 2005. The empirical results show in both sectors there is Granger causality where agriculture causes both exports and manufacturing. Exports also cause both agricultural GDP and manufacturing GDP and any two variables out of three jointly cause the third one. There is also some evidence that manufacturing does not cause export and agriculture. Regarding cointegration, pairwise agricultural GDP and export are cointegrated, export and manufacture are cointegrated. Agriculture and manufacture are cointegrated but they are lag sensitive. However, three variables, manufacturing, export and agriculture both together are cointegrated showing that they share long run relation and this has important economic implications.
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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number
136.
Length: Date of creation: Feb 2008 Date of revision: Publication status: Published in IDE Discussion Paper. No. 136. 2008.2 Handle: RePEc:jet:dpaper:dpaper136
Find related papers by JEL classification: C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Hypothesis Testing C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions C5 - Mathematical and Quantitative Methods - - Econometric Modeling F14 - International Economics - - Trade - - - Country and Industry Studies of Trade F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
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