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Long-Term Correlations between the Development of Rail Transport and the Economic Growth of the German Reich (1872-1913)

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  • Janusz Myszczyszyn
  • Bartosz Mickiewicz

Abstract

Purpose: This study is part of the trend of researching new economic history using econometric analysis (the new economic history paradigm), still not very popular in Europe and the world (outside the USA and UK). The main purpose of the article was to use the Granger cointegration test to confirm the long-term correlations between the level of economic growth and the development of the German Reich railways. Design/Methodology/Approach: In the field of theoretical analysis, a review of international literature on the study of the interdependence of economic growth and the development of transport, including rail transport, was carried out. The empirical analysis was based on available statistical data for the period of 1872–1913. Econometric methods were used, including: stationary test using ADF and KPSS tests, Engle-Granger cointegration test, as well as the analysis of the impulse response function. Findings: The results of the research received confirm that there was a long-term correlation between the level of economic growth in Germany (expressed as Net National Product (NNP) and the level of rail freight symbolizing the development of railways. Practical Implications: The Granger causality test allows the elimination of economic variables that are not in a causal relationship, which in turn leads to a better explanation of the studied economic phenomenon. A special case in VAR auto-regression models when the analysed time series are integrated in the first degree I(1). Originality/Value: Considering the importance of transport for the economy, it is particularly important to examine whether the development of transport had an impact on the level of economic growth, and whether economic growth led to the development of the transport industry, and perhaps this relationship was two-way. The obtained results are the foundation for the construction of vector-autoregressive models (VAR) and the study of long-term relationships.

Suggested Citation

  • Janusz Myszczyszyn & Bartosz Mickiewicz, 2019. "Long-Term Correlations between the Development of Rail Transport and the Economic Growth of the German Reich (1872-1913)," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 126-139.
    • Handle: RePEc:ers:journl:v:xxii:y:2019:i:4:p:126-139
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    References listed on IDEAS

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    1. Fedderke, J.W. & Perkins, P. & Luiz, J.M., 2006. "Infrastructural investment in long-run economic growth: South Africa 1875-2001," World Development, Elsevier, vol. 34(6), pages 1037-1059, June.
    2. Burhop, Carsten & Wolff, Guntram B., 2005. "A Compromise Estimate of German Net National Product, 1851–1913, and its Implications for Growth and Business Cycles," The Journal of Economic History, Cambridge University Press, vol. 65(3), pages 613-657, September.
    3. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    4. 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.
    5. Kulshreshtha, Mudit & Nag, Barnali & Kulshrestha, Mukul, 2001. "A multivariate cointegrating vector auto regressive model of freight transport demand: evidence from Indian railways," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(1), pages 29-45, January.
    6. William E. Cullison, 1993. "Public investment and economic growth," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 19-34.
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    Cited by:

    1. Irena Lacka & Janusz Myszczyszyn & Sylwia Golab & Beata Bedzik & Blazej Supron, 2020. "Correlation between the Level of Economic Growth and Foreign Trade: The Case of the V4 Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 657-678.
    2. Piotr Rosik & Julia Wójcik, 2022. "Transport Infrastructure and Regional Development: A Survey of Literature on Wider Economic and Spatial Impacts," Sustainability, MDPI, vol. 15(1), pages 1-19, December.

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    More about this item

    Keywords

    Cointegration; economic growth; development of rail transport.;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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