Economic growth and foreign trade in the 25 years of the Real Plan

analysis using co-integration and causality relations

Abstract

This article aims to analyze the relationship and applicability of the Export-Led Growth model for the Brazilian economy, from July 1994 to June 2019. In this aspect, we sought to analyze the behavior of the Brazilian economy, in the period that contemplates the 25 years of the Real Plan, through two of the main macroeconomic variables: the gross domestic product (GDP) and exports, monthly. For that, the econometric tests of the autoregressive model (VAR) and error correction (VEC) were applied, in level and in the first difference, in addition to using the methodologies of Granger (1980) and Johansen and Joselius (1990) to estimate whether GDP (proxy for economic growth) and exports would be co-integrated with the first order. The objective was to test the existence of a cointegration between the variables, economic growth, and exports; and identify the causality of the process. It is concluded that the variables are co-integrated, so there is a long-term relationship between growth and exports in the analyzed period. In the short term, the estimated results suggest that both Granger exports cause economic growth and Granger economic growth cause Brazilian exports. Thus, there would be a bicausal relationship in the short term between the variables analyzed.