The Trade-Growth Relationship in Israel Revisited: Evidence from Annual Data, 1960-2004
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Salem M Abo-Zaid
The topic of trade effects on economic growth has been usually controversial. Former empirical evidence linking trade to growth in Israel has been mixed and inconclusive either. This study reexamines the role of trade in Israel by testing for cointegration and causality from both exports and imports to output and total factor productivity over the period 1960-2004. The results suggest that both output and TFP are positively long-run correlated with exports and imports. The Granger causality tests indicate positive effects of exports on both output and TFP, where imports influence output only. In addition, physical capital has also been found to be Granger-caused by imports. This may suggest that the impact of imports on output is through the accumulation of physical capital and/or improvement in TFP over time.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
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- A Coincident Indicator of the Gulf Cooperation Council Business Cycle
- Fiscal Policy and Growth in Saudi Arabia
- Markov Switching and State-Space Approaches for Investigating the Link between Egyptian Inflation Level and Uncertainty
- The Trade-Growth Relationship in Israel Revisited: Evidence from Annual Data, 1960-2004
Articles in the same Issue
- Article
- A Coincident Indicator of the Gulf Cooperation Council Business Cycle
- Fiscal Policy and Growth in Saudi Arabia
- Markov Switching and State-Space Approaches for Investigating the Link between Egyptian Inflation Level and Uncertainty
- The Trade-Growth Relationship in Israel Revisited: Evidence from Annual Data, 1960-2004
