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Trade and Economic Growth in Germany

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  • Bakari, Sayef

Abstract

The nexus between trade and economic growth in Germany has been widely debated given to the high economic status compared to most countries in the world. This paper investigates the relationship between exports, imports, and economic growth in Germany. In order to achieve this purpose, annual data were collected from the reports of World Bank for the periods between 1985 and 2015, was tested by using Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) stationary test, co integration analysis of Vector Auto Regression Model and the Granger-Causality tests. According to the result of the analysis, unit root tests show that economic growth, exports and imports series become stationary when first difference is considered. Also, it was determined by using co integration analysis of Vector Auto Regression Model that there is no relationship between the three variables in Germany. On the other hand, and according to the Granger-Causality tests, we defined that there is unidirectional causality between exports and imports and between exports and economic growth. In addition, we found that there is a strong evidence of bidirectional causality from import to economic growth. These results provide evidence that exports and imports, thus, are seen as the source of economic growth in Germany.

Suggested Citation

  • Bakari, Sayef, 2017. "Trade and Economic Growth in Germany," MPRA Paper 77404, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77404
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    References listed on IDEAS

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    2. repec:gdk:wpaper:15 is not listed on IDEAS
    3. Rubina Vohra, 2001. "Export and economic growth: Further time series evidence from less-developed countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 7(3), pages 345-350, August.
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    7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    8. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    9. Awokuse, Titus O., 2007. "Causality between exports, imports, and economic growth: Evidence from transition economies," Economics Letters, Elsevier, vol. 94(3), pages 389-395, March.
    10. Esfahani, Hadi Salehi, 1991. "Exports, imports, and economic growth in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 35(1), pages 93-116, January.
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    Cited by:

    1. Bakari, Sayef & El Weriemmi, Malek & Mabrouki, Mohamed, 2022. "The Impact of Digitalization and Trade Openness on Economic Growth: New Evidence from Richest Asian Countries," MPRA Paper 113816, University Library of Munich, Germany.
    2. Bakari, Sayef, 2022. "The Nexus between Domestic Investment and Economic Growth in Developed Countries: Do Exports matter?," MPRA Paper 114394, University Library of Munich, Germany.
    3. Bakari, Sayef, 2022. "The Impact of Natural resources, CO2 Emission, Energy use, Domestic Investment, Innovation, Trade and Digitalization on Economic growth: Evidence from 52 African Countries," MPRA Paper 114323, University Library of Munich, Germany.
    4. Ben Yedder, Nadia & El Weriemmi, Malek & Bakari, Sayef, 2023. "Boosting Economic Growth in Angola: Unveiling the Dynamics of Domestic Investments and Exports," MPRA Paper 119480, University Library of Munich, Germany.
    5. Bakari, Sayef, 2017. "Why is South Africa Still a Developing Country?," MPRA Paper 80763, University Library of Munich, Germany.
    6. Deimante Blavasciunaite & Lina Garsviene & Kristina Matuzeviciute, 2020. "Trade Balance Effects on Economic Growth: Evidence from European Union Countries," Economies, MDPI, vol. 8(3), pages 1-15, July.
    7. Ben Yedder, Nadia & El Weriemmi, Malek & Bakari, Sayef, 2023. "The Impact of Domestic Investment and Trade on Economic Growth in North Africa Countries: New Evidence from Panel CS-ARDL Model," MPRA Paper 117956, University Library of Munich, Germany.

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    More about this item

    Keywords

    export; import; economic growth; Germany; Cointegration and Causality;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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