Trade, investment and growth: Nexus, analysis and prognosis

Kala Krishna, Ataman Ozyildirim, Norman R. Swanson

Research output: Contribution to journalArticlepeer-review

24 Scopus citations

Abstract

Patterns of causation between income, export, import and investment growth for 39 developing countries are examined using model selection techniques which are based on ex ante predictive ability criteria to identify the best predictive model for each country. In particular, we look at the incidence of causation and reverse causation between various economic variables which are commonly believed to lead economic growth and find that there is less reverse causation from income to these variables than previously thought. We also construct an index of global business cycle conditions and find that models of countries with high trade exposure, growth rates and investment rates tend to gain in predictive ability from the addition of this variable.

Original languageEnglish (US)
Pages (from-to)479-499
Number of pages21
JournalJournal of Development Economics
Volume70
Issue number2
DOIs
StatePublished - Apr 2003

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics

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