Impacts of trade openness on Myanmar's economic growth (1962~2019)

Abstract

This paper examines Myanmar''s economic growth rate by inflow of Trade Openness and the Vector Error Correction Model was applied. Purpose of this study is to see trade openness has long-term positive or negative effects on GDP growth rates. According to this study, in the long run, GDP growth rate is positively associated with Trade Openness. However, the relationship is not statistically significant. GDP growth rate and inflation are also negative long-term relationship. The results proved to be negative for inflation, and people were saving money in the banks because Myanmar''s interest rates were so high compared to other countries. Therefore, this study suggest that Myanmar’s government should change monetary policy like decreasing interest rate. Furthermore, government should adopt suitable tactical trade policies and implement important changes to ensure Myanmar''s long-term economic prosperity. In addition, the findings of this research can be utilized to inform future research in order to develop sound trade liberalization policies that will help Myanmar prosper economically.