Exploring Exports and Economic Growth Causality in Algeria

This paper investigates the causality relationship between economic growth, exports and imports in Algeria using Cointegration, Error Correction Model, and VEC Granger causality/Wald Exogeniety tests. The paper finds that economic growth in Algeria is linked to export industries and import is linked to economic growth. In other words, the growth in export sectors Granger causes economic growth which, in turn, promotes the growth of imports in Algeria. The paper suggests policy prescription that the government of Algeria should put emphasis on promoting growth and development of export industries by ensuring increased productivity in such sector