An Empirical Analysis of the Relationship between Exports and Economic Growth in Korea’s Economy

The main purpose of this paper is empirically to illustrate causality on the relationship between output(GDP) growth and exports in the Korea’s economy. For this aim, based on Modified Wald test, the result of the paper is to have a unidirectional causality from exports to GDP. However, this result is different compared to the bidirectional causality of previous studies on the Export-led growth for Korea. The dissimilarity might be attributed to different observation data, various variables, and use of different econometric methodologies. The model selection and omitting variables can also significantly change the results of causality testing.