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The Granger-Causality between Transportation and GDP: A Panel Data Approach

Author

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  • Mehmet Aldonat Beyzatlar

    (Department of Economics, Izmir University of Economics)

  • Müge Karacal

    (Department of Economics, Izmir University of Economics)

  • Ý. Hakan Yetkiner

    (Department of Economics, Izmir University of Economics)

Abstract

This study investigates the Granger-causality relationship between real per capita GDP and transportation of EU-15 countries using a panel data set covering the period 1970-2008. Our findings indicate that the dominant type of Granger-causality is bidirectional. Accordingly, we conclude that care must be paid in defining the dependent and independent variables when studying the relationship between transportation and income. Instances of one-way or no Granger-causality were found to correspond with countries with the lowest income per capita ranks in 1970 and/or in 2008, including Portugal, Greece and Italy. We speculate that bi-directional Granger causality between income and transportation is observed only after an economy has completed its transition in terms of economic development.

Suggested Citation

  • Mehmet Aldonat Beyzatlar & Müge Karacal & Ý. Hakan Yetkiner, 2012. "The Granger-Causality between Transportation and GDP: A Panel Data Approach," Working Papers 1203, Izmir University of Economics.
    • Handle: RePEc:izm:wpaper:1203
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    17. Li, Hongbo & Liu, Yali & Peng, Kaili, 2018. "Characterizing the relationship between road infrastructure and local economy using structural equation modeling," Transport Policy, Elsevier, vol. 61(C), pages 17-25.

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    More about this item

    Keywords

    Granger-causality; Transportation; Income;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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