Relationship between import-export trade and GDP in China
Zhang Xing-wang
Abstract
Zhang Xing-wang
Abstract
The Granger causality test were used to study the relation between import-export trade and the GDP in China from 1978 to 2004.The Granger causality test shows that there is one-way remarkable Granger causality relationship from import to GDP.By using generalized impulse response function analysis and variance decomposition,the results show that the impact of import on the GDP is much larger than that of the GDP on import,at the same time the generalized impulse response of the GDP is much larger than that of the GDP on import trade,furthermore the results also indicate that the import trade strongly affects the GDP.Therefore the import increasingly tread strongly affects the growth of the GDP.
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The Granger causality test were used to study the relation between import-export trade and the GDP in China from 1978 to 2004.The Granger causality test shows that there is one-way remarkable Granger causality relationship from import to GDP.By using generalized impulse response function analysis and variance decomposition,the results show that the impact of import on the GDP is much larger than that of the GDP on import,at the same time the generalized impulse response of the GDP is much larger than that of the GDP on import trade,furthermore the results also indicate that the import trade strongly affects the GDP.Therefore the import increasingly tread strongly affects the growth of the GDP.
Key concepts: Granger causality, Variance decomposition of forecast errors, Economics, Impulse response, China, Vector autoregression, Real gross domestic product, Causality (physics)