Exports and Economic Growth. A case study of U.S

Abstract

This article explain the significant econometric research that attempted to evaluate the causal relationship between the factors like exports and gross domestic product. Exogeneity and structural invariance, Granger causality, cointegration with multivariate error correction models, VAR models with variance decomposition, and impulse response functions are just a few of the methodological approaches handed down in these investigations. The evaluation in this work takes into account the empirical results and the approaches of one and the other factor that were exploit. One of the major results is that empirical evidence supporting export-led growth in eachindustrialized and developing nations is much lower than first thought depend on given correlation and production function research.

As a whole, economists have not been able to agree on the precise relationship between exports and GDP. It is hypothesised here that a rise in exports encourages an increase in aggregate economic growth rather than the other way around, and that this link is one of interdependence rather than unilateral causation.

It has solid rational and empirical support. Imports are essential to economic growth, and as exports increase, so do they. An export-oriented economy is more productive because its resources are concentrated in the most lucrative industries. In addition to allowing companies greater economies of scale, producing for international markets also encourages cost reductions because of the intense competition in these areas. Investment, the introduction of new managerial and technology skills, and consumer spending all increase in industries that are profitable at export. In this context, exports of goods and services are treated as a dependent variable, whereas GDP is treated as an independent variable.

 

Purpose: The purpose of this study is to examine the impact of exports and gross domestic product on the economic growth of USA.