Questions On Granger Causality Test Table 3

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5.1.5 RESULT FOR GRANGER CAUSALITY TEST Table 3:

Pairwise Granger Causality Tests
Date: 12/31/16 Time: 03:14
Sample: 1980 2014
Lags: 9 Null Hypothesis: Obs F-Statistic Probabiliy EXPORTS does not Granger Cause RGDP 26 11.0158 0.00228
RGDP does not Granger Cause EXPORTS 1.96909 0.19193 EMPL does not Granger Cause RGDP 26 9.44839 0.00365 RGDP does not Granger Cause EMPL 5.54812 0.01712 IMPORTS does not Granger Cause RGDP 26 0.95566 0.53661 RGDP does not Granger Cause IMPORTS 0.72990 0.67732

GDI does not Granger Cause RGDP 26 0.55345 0.79919 RGDP does not Granger Cause GDI 0.57093 0.78707

INFRAT does not Granger Cause RGDP 26 2.95875 0.08333 RGDP does not Granger Cause INFRAT 1.02953 0.49626 …show more content…

At first we couldn’t rejected the null hypothesis because result from table 1 shows that only two variables were stationary at level while four variables became stationary at first difference and the result gives us the strong proof of unit root in the variables. Therefore all variables were tested at first difference and the ADF test make known that all the variables became stationary at first difference, therefore, the null hypothesis at first difference of unit root were rejected so we concluded by saying that the variables became stationary after first difference. Which means that the variables are co-integrated of order one I(1), and this give us the chance to performed co-integration analysis. From the result, we realized that international trade in Liberia more than decades has produced a very little significant impact on economic growth. As a result, the viewpoint of the economy as of (1980-2014) is not much hopeful in spite of the constant trade flow into Liberia though, the country economy still undergoes so many problems, in this light, all variables using as proxies to international trade, only imports (IMP) was positive and significant while other remained significant but negative. This indicates major problems in the economy of Liberia and also confirmed why the nation economy has recorded a trade deficit