by Pop Silaghi, Monica Ioana;
Tosevska, Katerina and Borsic, Darjau
Published in Romanian Journal of Economic Forecasting, 2009, volume 10 issue 2, 105-117
| Requires a PDF viewer such as Xpdf
This paper examines the export-led growth hypothesis (ELG) and growth-led export hypothesis (GLE) for the Central and Eastern European Countries (Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovenia, Slovakia) through cointegration and causality tests. The estimation is carried out within finite-order vector autoregressive (VAR) models in levels, in first-differences and error correction models. When considering bivariate systems, causality from exports to GDP is obtained for Bulgaria, the Czech Republic, Estonia, Latvia and Lithuania. Causality from GDP to exports is indicated for Bulgaria, the Czech Republic, Estonia, Hungary, Lithuania, Romania and Slovenia. We also investigate if the above results still hold when including the other relevant component of the foreign trade, i.e. imports. In trivariate systems, ELG remains valid in the Czech Republic only and becomes valid in Lithuania while GLE is validated in Hungary, Romania and Slovenia.
CEE countries, exports, economic growth, imports, cointegration, Granger causality