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The Economics and Finance Letters

April 2015, Volume 2, 4, pp 35-44

Causal Relationship between Imports and Economic Growth in Zimbabwe: An Empirical Analysis 1975 – 2013

Vincent Moyo

,

Alexander Mapfumo

Vincent Moyo 1 Alexander Mapfumo 1 ,
;

  1. Department of Economics, Faculty of Commerce, Great Zimbabwe University, Masvingo, Zimbabwe 1

Pages: 35-44

DOI: 10.18488/journal.29/2015.2.4/29.4.35.44

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Abstract:

This study analysed the interconnectedness between economic growth and imports in the short and long run in Zimbabwe from 1975 to 2013. The Zimbabwean economy generally experienced positively associated trend between Gross Domestic Product and imports over the years.  For precise and effective policy formulation, it is therefore necessary to understand the nexus between the two mentioned macroeconomic variables.  Based on the results of the Johansen causality method, there is a short run unidirectional link between Gross Domestic Product and imports, running from imports to Gross Domestic Product.  In the long run no evidence exists for the connection between the two variables according to the Johansen co-integration tests.

Contribution/ Originality
This study contributes in the existing literature on the relationship between imports and economic growth. This study is one of very few studies which have investigated the causal relationship between imports and economic growth in Zimbabwe over a period of 38 years.

Keywords:

Imports, Economic growth, Policy, Johansen causality, VAR analysis, Zimbabwe.

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Reference:

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