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Openness Can Be Good For Growth New Evidence On Panama: 1980 - 2015

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  • BAKARI, SAYEF

Abstract

The nexus between trade and economic growth in Panama has been widely debated. This paper investigates the relationship between exports, imports, and economic growth in Panama. In order to achieve this purpose, annual data for the periods between 1980 and 2015 was tested by using Johansen co-integration analysis of Vector Auto Regression Model and the Granger-Causality tests. According to the result of the analysis, it was determined that there is no relationship between exports, imports and economic growth in Panama. On the other hand, we found that there is a strong evidence of bidirectional causality from imports to economic growth and from exports to economic growth. These results provide evidence that exports and imports, thus, are seen as the source of economic growth in Panama.

Suggested Citation

  • Bakari, Sayef, 2016. "Openness Can Be Good For Growth New Evidence On Panama: 1980 - 2015," MPRA Paper 75051, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:75051
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    References listed on IDEAS

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    1. Chang, Roberto & Kaltani, Linda & Loayza, Norman V., 2009. "Openness can be good for growth: The role of policy complementarities," Journal of Development Economics, Elsevier, vol. 90(1), pages 33-49, September.
    2. 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.
    3. Francisco Rodríguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338, National Bureau of Economic Research, Inc.
    4. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    5. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    More about this item

    Keywords

    export; import; economic growth; Panama; cointegration and causality.;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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