In this article, I use a multi¨ariate¨ector-autoregressi¨e VAR approach to examine the effects of permanent financial de¨elopment on domestic in¨estment and output in 41 countries between 1960 and 1993. The VAR approach permits the identification of the long-term cumulati¨e effects of financial de¨elopment on the domestic¨ariables by allowing for dynamic interactions among these¨ariables. The results reject the hypothesis that financial de¨elopment simply follows economic growth and has¨ery little effect on it. Instead, there is strong e¨idence that financial de¨elopment is important to growth and that in¨estment is an important channel Ž through which financial de¨elopment affects growth. JEL E22, E44, E47, O16, . O57

Although conventional wisdom suggests that export growth contributes positively to economic growth, empirical studies on the causal links between exports and output have provided little support for the exportled growth hypothesis. This paper reexamines the direction of causation by handling properly two important issues in causality tests: the characteristics of the data, and the choice of optimal lags. The results of this study show that in a sample of 32 economies, the export‐led hypothesis is supported by 17 economies and is strongly supported by 9 economies.

No abstract

A VAR approach is used to analyze the effects of export growth on the evolution of GDP, domestic employment, and investment in 39 economies. The results strongly support the export-led growth hypothesis. Export growth affects GDP growth positively in 30 countries. In six countries, all of them inward-looking, the effects are negative. For these countries, and for these countries alone, export growth has a negative effect on the evolution of both domestic employment and investment. This also suggests the importance of the indirect effects of exports on GDP growth.

Income convergence, Economic freedom, Political freedom, Stages of development, OECD countries, C12, C23, O53, O57,