Investigating the Export and Economic Growth Nexus : A Time Series Analysis

We have evaluated the export-led growth (ELG) hypothesis for Pakistan for the period 1990-2006 using quarterly data. We have used VAR, Granger-causality, and Johansen’s co-integration techniques as suggested by a vast majority of available literature on the subject. VAR and Granger causality analysis failed to provide evidence for ELG while a long-term relationship is indicated by Johansen cointegration analysis. Broadly, the results suggest that the ELG hypothesis is not fully applicable, especially in the short run, though the presence of a long-run relationship cannot be ruled out