Abstract: This study examined the causal relationship between Aggregated Imports and Economic Growth of South Africa for the period 1979 to 2014. In this study we use the Granger Causality to estimate the regression equation. The first step is to make the data stationary to avoid spurious regression. Based on the stationarity test results, cointegration tests were conducted to test for the existence of long-run relationship between Aggregated Imports and Economic Growth. The Error Correction Model (ECM) was employed to establish the short-run dynamics and speed of adjustment to the long-run. The estimation results for both the short-run and long-run models revealed that Aggregated Imports have a significant influence on Economic Growth. This was revealed through a uni-directional causality, with Economic Growth granger causing Aggregated Imports for both in the short-run and long-run periods. In the joint period analysis, there was evidence of a bi-directional causality with the two variables influencing each other.
Keywords: Economic growth, Aggregated Imports, Error Correction, Granger Causality, Cointegration.
Title: Aggregated Imports and Economic Growth Nexus of South Africa: A Causal Regression Analysis
Author: Shame Mukoka
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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