Economic Interdependence Between The Gdp and External Trade in Romania – A VEC Method Analyse

Abstract

Trading transactions between nations have a very long history, but in recent years international trade has become increasingly important with a larger share of GDP devoted to exports and imports and it is considered to be a major component of sustainable economic growth. The correlation between external trade flows and gross domestic product (GDP) have been analyzed in many specialized economic papers. The developed econometric models have demonstrated the strong connection between these macroeconomic indicators. This paper once again demonstrates the long-term and short-term relationship between these variables using the VEC econometric model on quarterly GDP, Export, Import and GFCF data of Romania from 1995 to 2015. The VECM analysis was performed using R statistical software and is based on data extracted from the Eurostat, European Union Statistical Office website and are expressed in millions of euro.

Keywords

• GDP
• export
• import
• GFCF
• vector correction error
• heteroscedasticity
• cointegration
• stationarity