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Does Trade Drive Global Growth?

Author

Listed:
  • Leon Podkaminer

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Conventional econometric analysis using VEC suggests that there is a long-term relationship between nominal world GDP and nominal world exports. The analysis cannot say anything about the causal relationships between the levels of GDP and exports. But it says a lot about the rules governing the short-term adjustments in GDP and exports. When considering such short-term adjustments, GDP plays the first fiddle. Short-term GDP changes have driven short-term changes in world exports, at least over the years 1987-2008. But the short-term changes in world exports did not ‘cause’ positive short-term changes in GDP.

Suggested Citation

  • Leon Podkaminer, 2013. "Does Trade Drive Global Growth?," wiiw Research Reports 386, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:rpaper:rr:386
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    File URL: https://wiiw.ac.at/does-trade-drive-global-growth-dlp-2907.pdf
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    More about this item

    Keywords

    world income; world trade; growth; globalization; VEC; Granger causality;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F15 - International Economics - - Trade - - - Economic Integration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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