Export-led growth and terms of trade volatility in the East African Community trade bloc

Barnabas A. Kiiza, Glenn D. Pederson

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

The export-led growth hypothesis is examined for five East African Community trade bloc countries using panel co-integration methods. Results indicate that exports have a positive and significant effect on exports-adjusted GDP in the long- and short-run horizons. In addition, an increase in terms of trade volatility has a negative and significant impact on GDP. The bulk of exports are primary commodities which are vulnerable to high terms of trade volatility. This increases the probability of reversing the gains from export-led growth. These countries should emphasize policies that lead to an increase in the share of value-added commodities in total exports.

Original languageEnglish (US)
Title of host publicationAgriculture and Trade
Subtitle of host publicationInternational Perspectives
PublisherNova Science Publishers, Inc.
Pages165-181
Number of pages17
ISBN (Electronic)9781629489858
ISBN (Print)9781629489759
StatePublished - Jan 1 2014

Keywords

  • East Africa
  • Export-led growth
  • Terms of trade volatility
  • Trade

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