Purpose
This paper investigates the relationship between exports, imports, and economic growth in Mauritania.
Methodology
In order to achieve this purpose, annual data were collected from the reports of World Bank for the periods between 1960 and 2015, was tested by using Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) stationary test, co integration analysis of Vector Error Correction Model and the Granger-Causality tests.
Findings
According to the result of the analysis, unit root tests show that economic growth, exports and imports series become stationary when first difference is considered. Also, it was determined by using cointegration analysis that there is relationship between the three variables in Mauritania. Also, and according to the Vector Error Correction Model, exports have a positive effect on economic growth. However, imports have a negative effect on economic growth. On the other hand, and according to the Granger-Causality tests, we defined that there is unidirectional causality between imports and economic growth. In addition, the results of the Granger Causality Tests show that there is no relation of causality between exports and GDP.
Recommendations
These results provide evidence that imports, thus, are seen as the source of economic growth in Mauritania.