The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach.
A publication by Mr Robson Mandishekwa a Lecturer in the Department of Economics, Midlands State University, Zimbabwe
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Midlands State University
2017
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| Online Access: | http://hdl.handle.net/11408/1973 |
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| author | Mandishekwa, Robson |
| author_facet | Mandishekwa, Robson |
| author_sort | Mandishekwa, Robson |
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| description | A publication by Mr Robson Mandishekwa a Lecturer in the Department of Economics, Midlands State University, Zimbabwe |
| format | Article |
| id | ir-11408-1973 |
| institution | My University |
| language | English |
| publishDate | 2017 |
| publisher | Midlands State University |
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| spelling | ir-11408-19732022-06-27T13:49:06Z The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach. Mandishekwa, Robson Trade openness Gross domestic product Terms of Trade, variance decomposition, Zimbabwe A publication by Mr Robson Mandishekwa a Lecturer in the Department of Economics, Midlands State University, Zimbabwe The objective of the paper is to investigate whether the conventional wisdom of openness as a panacea to economic development applies in Zimbabwe. To investigate this issue, vector auto-regressive and Granger-causality methods of testing for causality were applied. Using trade openness index and terms of trade as trade indicators, it was established that the three variables Granger caused each other, except for Terms of trade and GDP growth which showed unidirectional causality running from GDP growth to terms of trade. Variance decompositions, however, show that the variance of GDP are mostly from GDP itself while the variance decompositions of terms of trade emanates also mainly from GDP changes. The Zimbabwean government is therefore urged to pursue liberalisation so as to attain its development goal. This is so because trade openness was found to Granger-cause GDP growth. Since variance decompositions showed that GDP was found to add more to variations in GDP, the government is recommended to minimise the variations in GDP especially those in the negative. 2017-05-31T15:09:16Z 2017-05-31T15:09:16Z 2016 Article 1815-9036 http://hdl.handle.net/11408/1973 en The Dyke: A Journal of the Midlands State University;Vol. 10, No. 2; p.66-76 open Midlands State University |
| spellingShingle | Trade openness Gross domestic product Terms of Trade, variance decomposition, Zimbabwe Mandishekwa, Robson The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach. |
| title | The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach. |
| title_full | The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach. |
| title_fullStr | The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach. |
| title_full_unstemmed | The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach. |
| title_short | The relationship between trade openness, terms of trade and economic growth in Zimbabwe: a VAR approach. |
| title_sort | relationship between trade openness, terms of trade and economic growth in zimbabwe: a var approach. |
| topic | Trade openness Gross domestic product Terms of Trade, variance decomposition, Zimbabwe |
| url | http://hdl.handle.net/11408/1973 |
| work_keys_str_mv | AT mandishekwarobson therelationshipbetweentradeopennesstermsoftradeandeconomicgrowthinzimbabweavarapproach AT mandishekwarobson relationshipbetweentradeopennesstermsoftradeandeconomicgrowthinzimbabweavarapproach |