CAUSALITYBETWEEN TRADE OPENNESSANDECONOMĠCGROWTH: THE CASE OF TURKEYOVERTHEPERIOD 1999-2016

Abstract

Trade openness is defined as the simple average ( the mean) of total trade (the sum of exports and imports of goods and services) relative to GDP and it is ecpected that it affects economic growth. This paper empirically investigates the dynamic relation between trade openness and economic growth over the period of 1999:1-2016:4. We examine the presence of dyanic relation between the variables by means of the vector autoregression models (VAR) and the lagged augmented VAR models. Econometric analysis results suggest that although the economic growth is the Granger cause of trade openness, it cannot be found the causal link running from the trade openness to the economic growth.