Study on the Impact of Export and Import on Economic Growth in Iran

Abstract

This paper investigated VAR method between import, export and economic growth in Iran over the period 19622011.The role of the import and export variables in the investigation of economic growth output cointegration analysis is emphasized, enabling one to test for the cases direct long run relationship, indirect long run relationship, and impulse, response function between export and import and economic growth. The empirical results did confirm a long run relationship between the variables considered. Based on results, export had direct and positive relationship with economic growth in long run. Also import had a significant and negative relationship with economic growth then import had negative effect on economic growth in long-term. We also saw a shock on the export has had a positive effect on economic growth; the other hand a shock on import error term had not much effect on economic growth so a shock on import could not positive effect on economic growth.