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2017•Bulletin of Economic Theory and AnalysisOpen access

The Relation between Foreign Trade and Economic Growth: A Causality Analysis on the Case Iran

Bayram Ata, Tevfik Eren

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Abstract

In this paper, we have investigated briefly the economic structure of Iran and assessed the effects of foreign trade as one of the most important factor on economic development. We used the Granger causality analysis to examine whether Iran’s foreign trade is related with its economic growth. The results show that both import and export are granger cause of economic growth. To conclude we can say that the results prove a certain causality between Iran’s foreign trade and its economic development.

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What this paper is about

In this paper, we have investigated briefly the economic structure of Iran and assessed the effects of foreign trade as one of the most important factor on economic development. We used the Granger causality analysis to examine whether Iran’s foreign trade is related with its economic growth. The results show that both import and export are granger cause of economic growth. To conclude we can say that the results prove a certain causality between Iran’s foreign trade and its economic development.

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Available abstract

In this paper, we have investigated briefly the economic structure of Iran and assessed the effects of foreign trade as one of the most important factor on economic development. We used the Granger causality analysis to examine whether Iran’s foreign trade is related with its economic growth. The results show that both import and export are granger cause of economic growth. To conclude we can say that the results prove a certain causality between Iran’s foreign trade and its economic development.

Key concepts: Granger causality, Causality (physics), Economics, International economics, International trade, Monetary economics, Econometrics, Physics

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