International trade and income in Malawi: a co-integration and causality approach uri icon

abstract

  • This paper investigates causal relationships between exports, imports, and economic growth in Malawi over the period 1961-2010. These relationships are examined using the Johansen frameworks for co-integration whereas the Vector Error Correction (VECM) framework is further used to provide estimates for both short-run and long-run dynamics in the series under study. The empirical results, including the impulse responses support the export-led economic growth and export driven imports hypotheses in the long run, but they provide no evidence of any economic growth-driven exports. These results strongly support the role of international trade in MalawiĆ¢??s economic development and hence policies that seek to facilitate MalawiĆ¢??s trade within and outside the SADC regional would be worthwhile to pursue

publication date

  • 2013