AN INVESTIGATION OF COINTEGRATION AND CAUSALITY BETWEEN INVESTMENTS, EXPORTS, OPENNESS, INDUSTRIAL PRODUCTION AND ECONOMIC GROWTH: A COMPARATIVE STUDY FOR THE EAST EUROPEAN COUNTRIES

The study of the economic growth has old implications. An analysis of relevant literature shows that there is a series of empirical studies that have analysed, tested and explained the correlation between the dynamics of exports, investments, the openness of economies and the process of economic growth. This paper examines the role of investments, export and openness in relation to economic growth for 10 East European countries using quarterly data between 2000 and 2013. Unit root tests were used in order to analyse the stationarity of variables. We have then employed the Johansen Cointegration test in order to identify the existence of a long-run relationship between the variables as well as the Granger causality test in order to test the hypotheses about the presence of causality between selected variables. At the same time VAR and VECM models were estimated for each of the 10 East European Countries; a comparative analysis of the results shows the presence, direction and intensity of the correlation and causality between investments, exports, openness and economic growth