Causality Analysis on Export and Economic Growth Nexus in Ghana

Abstract

The study examined the causal relationship between export and economic growth based on monthly data for the period 2010 to 2019. Composite Index Economic Activity (CIEA) was used as a proxy for real GDP (economic growth). Time series econometric techniques were employed to explore long-run and short run relationships as well as the causality between them. The results revealed the existence of long-run relationships; evidence of bi-directional causality and a rapid adjustment to equilibrium between real GDP and exports. Recommendations are that, policy makers should focus on implementing export oriented policies and promote economic growth to achieve sustainable development.