NONLINEAR ADJUSTMENTS IN THE EXPORT-LED GROWTH HYPOTHESIS: RE-EXAMINING THE HUNGARIAN CASE

Author:

Novak Ivan

Abstract

This paper aims to examine the non-linear adjustments between exports and gross domestic product (GDP) in Hungary. In order to test the export-led growth hypothesis in the Hungarian economy this research analyses data from 1996Q1-2016Q4. Applying relatively novel approach to export-led growth hypothesis likely nonlinear asymmetric effect of exports and GDP toward their long-run equilibrium is tested. The results disclose a threshold cointegrating connection between the selected variables providing more insights into export led growth hypothesis. Unlike previous studies, research results reveal unidirectional and bidirectional causality in the long-run Hungarian exports-growth nexus which depends on the regime process with significantly different error correction adjustments in normal and stress regimes. Exports is found to be an engine of economic growth in Hungary for entire period but in times of stress when domestic demand contracts the role of exports in economic growth becomes more prominent and takes the basic form of export led growth hypothesis. Empirical results in this paper clearly points that threshold cointegration approach offers deeper insights than the linear error-correction model and might be the proper model specification to examine export led growth hypothesis.

Publisher

National and University Library of the Republic of Srpska

Cited by 1 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Exports and economic growth: relationships and threshold analysis for the Southern Africa customs union;International Journal of Research in Business and Social Science (2147- 4478);2023-12-11

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