International Trade and Economic Growth Nexus in Australia: A Robust Evidence from Time-Series Estimators

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Title International Trade and Economic Growth Nexus in Australia: A Robust Evidence from Time-Series Estimators
Author Singh, Tarlok
Journal Name The World Economy
Year Published 2011
Place of publication United Kingdom
Publisher Wiley-Blackwell
Abstract This study examines the effects of international trade on output and tests the null of Granger non-causality between trade and economic growth in Australia. The single-equation IV-GMM, DOLS, FMOLS and NLLS and the system-based ML estimates consistently support the positive and significant long-run effects of exports and investment on output. The effects of imports are consistently negative across all the estimates. The OLSEG, RLS and ARDL-ECM estimates provide a mixed and weak and that overparameterised level-VAR estimates no support for the effects of trade on output. The estimates of the model with structural breaks provide a dominant support for the cointegrating relationship among variables. In conclusion, the evidence supporting the positive and significant long-run effects overwhelms the evidence providing a mixed, weak or no support for the effects of trade on output. The results of the study can be inductively generalised to mimic the findings of the literature at large and to suggest that a part of the inconclusiveness over the gains of trade could analogously be ascribed to the use of different methodologies and test statistics across studies. The results support the acceleration of exports and investment to foster the higher levels of output and economic growth.
Peer Reviewed Yes
Published Yes
Alternative URI http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9701.2011.01341.x/abstract
Volume 34
Issue Number 8
Page from 1348
Page to 1394
ISSN 1467-9701
Date Accessioned 2012-03-09; 2012-03-20T23:12:00Z
Date Available 2012-03-20T23:12:00Z
Research Centre Griffith Asia Institute
Faculty Griffith Business School
Subject International Economics and International Finance
URI http://hdl.handle.net/10072/43722
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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