The nexus between remittance, exchange rate and economic growth of E7 economies: Frequency domain analysis

This study investigates the nexus between economic growth (GDP), trade openness, remittances, exchange rate, and agricultural output in E7 (Russia, Indonesia, Mexico, China, India, Brazil, and Turkey) economies, covering the data from 1990 to 2020. In the first step, we adopted the Dumitrescu and Hurlin time domain Granger causality test, which shows that economic growth (GDP) and agriculture do not have any causal relationship, not even at 3-lags. However, uni-directional causality exists between agriculture and economic growth at the first level difference. In the second step, we used Granger causality analysis in the frequency domain, presented by Croux and Reusens, showing a bivariate correlation among economic growth, trade, remittance, and agricultural output. The panel Granger causality outcome indicated that the causality between variables with various frequencies differs. Policymakers in these economies may consider these pragmatic results to formulate valuable and appropriate short-, medium-, and long-term economic strategies.