On Exports and Economic Growth : The Case of Italy

The export-led growth hypothesis for the Italian economy (1960-98) is tested through a VAR model with four macroeconomic variables: an index of the GDP of the rest of the world; the Italian real exchange rate; Italian real exports; and the Italian real GDP. Our results provide clear empirical support for the hypothesis. They also suggest that the Kaldorian approach is very useful in analysing short-run as well as long-run growth and fluctuations of an open economy such as Italy