Exports and economic growth in Pakistan: Evidence from ordinary least squares and granger causality tests

This paper accesses the effects of Exports on Gross Domestic Product of Pakistan for the period of 1971 to 2011. GDP is taken as dependent variable and exports as independent variable. Augmented Dicky Fuller test has been used to check the stationary of the variables. As time series data show trend with the time so it is removed by differencing. Granger causality test shows uni-directional relation from GDP to Exports. The results of ordinary least squares method show positive relation between exports and GDP of Pakistan. One percent increase in exports will raise GDP by 0.81%. An expansion of exports will lead to an increase in economic growth. This increased economic growth can lead to more exports. It is necessary to make agriculture sector strong because our exports depend on this sector.