Impact of Import and Export on GDP of Egypt: Application of ARDL Model

Abstract

This paper examines the applications of Autoregressive Distributed Lag (ARDL) model in the analysis of Egypt’s import and export data concerning the consequential impacts on the country’s Gross Domestic Product (GDP) between 1980 to 2010 years. Given that exports and imports significantly impact the economic status of Egypt through the balance of payment, it is therefore vital for policymakers to adequately comprehend and understand the factors affecting the revenue of the country’s economy. The study provides a wide range of elasticity estimates made from the data collected in the field. Moreover, this paper seeks to examine the current estimated import and export demand function for Egypt by employing the ARDL approach using the Eviews program. The results from ARDL approach analysis agrees with the hypothesis that Egypt has a long run relationship with export, import demand, economic growth prices of exports and imports, and volatility of an actual effective exchange rate in the market. Therefore, the imports and exports in Egypt are affected by the country’s GDP. Hence it is growth driven.