Exports, imports and growth. New evidence on Italy: 1863-2004
AbstractThe nexus between trade and economic growth in Italy has been widely debated by historiography. However, there are not long run analysis on this topic that cover the whole span from Unification to present days. This paper contributes to fill this gap by investigating the relationship between real exports, imports and GDP in Italy from 1863 to 2004 by using cointegration analysis and causality tests. The outcome suggests that these variables comove in the long run but the direction of causality varies across time. In the period prior to the First World War import growth led GDP growth that in turn led export growth. Conversely, in the post-Second World War period we have a strong bidirectionality between imports and exports consequent on the increase in intra-industry trade. We also find a weak support for export-led growth and growth-led imports. This suggests that exports were not the only or the main driver of economic growth. There was probably a multiplicity of factors at work, among which high rates of capital formation and the expansion of internal demand probably stood out
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Bibliographic InfoPaper provided by University of Modena and Reggio E., Faculty of Economics "Marco Biagi" in its series Department of Economics with number 0666.
Length: pages 43
Date of creation: Oct 2011
Date of revision:
Trade; economic growth; Italy; unit root tests; cointegration analysis; Granger-causality;
Find related papers by JEL classification:
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
- N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-19 (All new papers)
- NEP-FDG-2011-12-19 (Financial Development & Growth)
- NEP-INT-2011-12-19 (International Trade)
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