Do Exports and Imports Affect the Gross Domestic Product in Palestine During the Period (2000-2020)?

Abstract

This paper examines the relationship between exports, imports, and GDP in Palestine. To achieve this, annual data from 2000 to 2020 was utilized. Johansen's test for cointegration analysis was employed to estimate the VAR model and conduct Granger-Causality tests. Based on the results of the analysis, the least squares (OLS) regression test indicated that there is no causal relationship between exports, imports, and GDP, as demonstrated by Granger's test. Additionally, the VAR test revealed that exports do not affect GDP. However, it is expected that imports have a positive impact on the GDP of Palestine. These findings confirm that imports influence GDP, suggesting that they are one of the contributing factors to economic growth in Palestine.