🗊Презентация Japan. The relationship between real GDP and real primary exports

The relationship between real GDP and Real Primary Exports

Context Motivation behind the country selection Country profile GDP and Export relationship Methodology Results Conclusion

Reason of choice 3rd largest economy in the world Japanese cultural philosophy in their economy Small agricultural area – High yield Worldwide known mastery of manufacturing Infrastructure investments

Country profile

GDP Growth

GDP composition

Real Export

Export Structure

Exports (% of GDP)

GDP and export relationship No foreign constraints Improved technology Increased productivity Economies of scale More production  more export

Methodology Unit root test Co – integration test Vector Autoregressive model

Unit root test H0: γ = 0 (Non-stationary) HA: γ < 0 (Stationary) Non-stationary at level, but stationary at first difference

Co - integration test H0: non-stationary residuals (no co-integration exists) HA: the residuals are stationary (co-integration exists) -7.3375 < -3.67 , therefore, we can reject the null The GDP and Exports are co-integrated

VAR model DX(-1) and DY(-1) are not significant No short-run effect from exports to GDP No short-run effect from GDP to exports

Conclusion Decline in Real GDP and Real Exports Unit root test – series are non-stationary Co-integration test – real GDP and real Export are co-integrated VAR model – there is no short term relationship of GDP and Export

References Hill, C. E., Griffiths, W. E. & Lim, G. C., 2008. Principles of econometrics. 3d ed. Danvers: John Wiley & Sons Inc.. Mucahit, A. & Murat, S., 2014. RELATIONSHIP BETWEEN GDP AND EXPORT IN TURKEY. [Online] Available at: http://www.utgjiu.ro/revista/ec/pdf/2014-4.Special/51_Muchahit,%20Sari.pdf [Accessed 16 February 2017]. The World Bank, n.d. DataBank. World Development Indicators. [Online] Available at: http://databank.worldbank.org/data/reports.aspx?source=world-evelopment-indicators# [Accessed 15 February 2017]. World Trade Organisation, n.d. Merchandise trade by commodity. [Online] Available at: http://stat.wto.org/StatisticalProgram/WSDBStatProgramHome.aspx?Language=E [Accessed 15 February 2017]. Zang, W. & Baimbridge, M., 2012. Exports, imports and economic growth in South Korea and Japan: a tale of two economies, Nottingham: Applied Economics.