THE SENSE OF CAUSALITY BETWEEN GROWTH AND ECONOMIC DEVELOPMENT: AN ESSAY ON VAR MODELING IN THE CASE OF TUNISIA

Abstract

The purpose of this article is to study the relationship between economic growth and development. Even if it is recognized that economic growth is definitely a condition of development, it is not always a sufficient condition. In this research, we are interested to demonstrate the extent to which growth promotes the development. Did the development leads to growth? Our empirical investigation attempts to test the relationship between GDP and the three components of the development indicator (HDI). Using the techniques of VAR modeling and causality in Granger's sense, in the framework of the Tunisian economy during the period from 1970 to 2015, the results of the estimates show the existence of a reciprocal link between economic growth and development.