ARE EXPORTS CAUSING GROWTH? EVIDENCE ON INTERNATIONAL TRADE EXPANSION IN CUBA, 1960-2004

Fugarolas, Guadalupe and Mañalich, Isis and Matesanz, David (2007): ARE EXPORTS CAUSING GROWTH? EVIDENCE ON INTERNATIONAL TRADE EXPANSION IN CUBA, 1960-2004.

Abstract

Economic development in Cuban economy in the last 50 years has been involved in the so called socialist revolution time. In the external sector, the COMECON arrangements have determined its international specialization trade pattern and balance of payments position until 1989. When the Berlin Wall fell down, Cuban economy collapsed showing the malfunctions of the previous external regulated period. In this paper, we analyzed the role of exports as an engine of economic growth in Cuba considering essential events in its commercial policy-making in the long period from 1960 to 2004. Our results show that the export led growth (ELG) hypothesis is not an appealing phenomenon. Causality proofs on the basis of error correction and augmented level VAR modellings show the imperious necesssity to import for the Cuban development. The inclusion of imports not only evidences the weakness in the feedback and interrelation between economic growth and exports but also their expansion has been precisely causing growth in most of the considered periods.

• Item Type: MPRA Paper
• Language: English
• Keywords: Cuba, Export-led Growth, commercial agreements effects, cointegration, causality, error correction and augmented VAR modelling
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

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