Granger causality analysis of foreign trade impact on economic growth: Case of Azerbaijan

Abstract

Main purpose of the investigation is to define existing of causality relationship between foreign trade activity of Azerbaijan and economic growth. There were used OLS method and cointegration between some macroeconomic indicators. Main conclusion is that there is not causality effect between import and GDP, but GDP growth is cause for changing import for lag=3. As well as there is causality effect between GDP growth and export. But there is not strong causality effect between foreign trade openness, foreign trade freedom and economic growth.