EuroEconomica, Vol 36, No 2 (2017)

Abstract

This paper investigates the relationship between exports, imports, domestic investment and economic growth in Egypt. In order to achieve this purpose, annual data for the periods between 1965 and 2015 was tested by using Johansen co-integration analysis of Vector Error Correction Model to explore the long run and the short run relationships between these variables. The empirical results indicate that in the long run domestic investment and exports have negative impact on economic growth, however imports have positive effect on economic growth. In the short run, empirical analyses show that only imports cause economic growth. These findings present the critical situation of Egypt, which requires an entry of urgent economic reforms