2010, Vol. 20, Issue 3-4, an item 1

GURGUL H., LACH £., International trade and economic growth in the Polish economy

    This paper presents the results of an examination of linear and nonlinear causality performed for international trade involving the Polish economy and its economic growth. In order to infer the impact of the world crisis on the Polish economy, we decided to study two samples (containing quarterly data) – the full sample (Q1 1996 – Q3 2009) and pre–crisis sample (Q1 1996 – Q3 2008). The linear causality tests applied support the existence of feedback between the growth rate of exports and growth in GDP irrespectively of the time period chosen. For both the samples examined, no direct causal links between the growth rates of GDP and imports were detected. One can only suppose the existence of indirect links before the crisis. Bidirectional causality was found for growth rates of exports and imports only for the pre–crisis sample. Some weak evidence of a causal link running from the growth rate of imports to the growth rate of exports was also found for the period that covers the crisis, which may be interpreted as a confirmation of the fact that growth in imports also precedes growth in exports in bullish periods. It results from our computations that, at the time of the financial crisis of 2008, the main factor that caused Polish GDP growth to remain positive was domestic demand. The results of nonlinear causality analysis provided only weak evidence of causality running from GDP to exports, from GDP to imports and from imports to exports.

Keywords: exports, imports, international trade openness, economic growth, Granger causality

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