A study in the Relationship between Openness and Economic Growth in Iran: Co-integration Analysis

Openness index is an issue that considered by many economists, decision and policy makers in most countries. In this paper the relationship between openness and economic growth in Iran with using of indigenous growth model as well as, time series data over 1971-2004 is investigated. For this purpose, we used Auto Regressive Distributed Lag Model (ARDL) and long-run and short-run relations between involved variables in model are considered. Results indicated that, there was long-run relationship and co-integration between involved variables and Gross Domestic Production variable. Furthermore, accompanied by other variables openness as a new variable, had a positive and significant effect on dependent variable. With regard to these findings, we are able to point that the growth of openness index will improve the economic growth.