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Is the export-led growth hypothesis valid for Canada?

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  • Titus O. Awokuse

Abstract

Empirical evidence linking exports to economic growth has been mixed and inconclusive. This study re-examines the export-led growth (ELG) hypothesis for Canada by testing for Granger causality from exports to national output growth using vector error correction models (VECM) and the augmented vector autoregressive (VAR) methodology developed in Toda and Yamamoto (1995). Application of recent developments in time series modelling and the inclusion of relevant variables omitted in previous studies help to clarify the contradictory results from prior studies on the Canadian economy. The empirical results suggest that a long-run steady state exists among the model's six variables and that Granger causal flow is unidirectional from real exports to real GDP.

Suggested Citation

  • Titus O. Awokuse, 2003. "Is the export-led growth hypothesis valid for Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 126-136, February.
    • Handle: RePEc:cje:issued:v:36:y:2003:i:1:p:126-136
    DOI: 10.1111/1540-5982.00006
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    More about this item

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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