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The relationship between the international trade and economic growth accounting for model uncertainty and reverse causality

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  • Czyżewski, Daniel

Abstract

This paper addresses issues connected with economic growth, how the theory on it has changed and also what its potential determinants are. In order to do so, the panel data was constructed for 129 countries with the time period of 1975-2015. In addition to this, the paper also accounts for the model uncertainty as well as reverse causality issues that may arise while dealing with such data. The methodology applied in the research consists of the Moral-Benito (2016) framework combined with the bayesian model averaging method (BMA). Out of the five variables, only one turned out to be fragile. The other four appeared to be robust with three of them at the most restrictive level. What is more, the paper also presents the potential reasoning behind obtained results and upholds the hypothesis that international trade has a positive impact on the economic growth.

Suggested Citation

  • Czyżewski, Daniel, 2021. "The relationship between the international trade and economic growth accounting for model uncertainty and reverse causality," MPRA Paper 108405, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:108405
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    References listed on IDEAS

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    1. Krzysztof Beck & Jakub Janus, 2013. "Aggregate Demand Disturbances in the Visegrad Group and the Eurozone," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 1(3), pages 7-19.
    2. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    3. Winford H. Masanjala & Chris Papageorgiou, 2008. "Rough and lonely road to prosperity: a reexamination of the sources of growth in Africa using Bayesian model averaging," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(5), pages 671-682.
    4. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    5. Krzysztof Beck, 2017. "Bayesian Model Averaging And Jointness Measures: Theoretical Framework And Application To The Gravity Model Of Trade," Statistics in Transition New Series, Polish Statistical Association, vol. 18(3), pages 393-412, September.
    6. Krzysztof Beck & Piotr Stanek, 2019. "Globalization or Regionalization of Stock Markets? the Case of Central and Eastern European Countries," Eastern European Economics, Taylor & Francis Journals, vol. 57(4), pages 317-330, July.
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    8. Krzysztof Beck, 2020. "Decoupling after the Crisis: Western and Eastern Business Cycles in the European Union," Eastern European Economics, Taylor & Francis Journals, vol. 58(1), pages 68-82, January.
    9. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • F19 - International Economics - - Trade - - - Other
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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