An Empirical Analysis on Dynamic Relationship Between External Trade and Economic Growth in China Based on VAR Model

摘要

In the paper, there is an empirical study on external trade and China's economic growth from 1978 to 2010 with a dynamic econometric analysis method based on VAR model, cointegration analysis, vector error correction model, Granger causality test and variance decomposition. The empirical analysis concludes: there is a stable equilibrium relation between external trade and China's real economic growth in the long run, and there is a reverse revision mechanism in the relation, and there is bidirectional causality between external trade and China's economic growth. Therefore, china should continue to adhere to the export-oriented development strategy to promote economic growth, and also pay much attention to the import trade's effect in promoting economic growth.