Abstract: This study examined the causal relationship between Aggregated Imports and Economic Growth of Botswana 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 joint period revealed that there is no relationship between Aggregated Imports and Economic Growth. However, in the long-run period, there was evidence of causality, with Economic Growth granger causing Aggregated Imports.
Keywords: Economic growth, Aggregated Imports, Error Correction, Granger Causality, Cointegration.
Title: An Empirical Analysis on the Causality Effect between Aggregated Imports and Economic Growth for Botswana
Author: Shame Mukoka
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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