Abstract:
There have been weaker growth rates, globally, being
coupled with an increase in trade protectionist policies, fall in
commodity prices, and high economic uncertainty in developed
nations. Developing countries face weak external positions due to
overreliance on trade to improve growth. In this context, this study uses
the Auto Regressive Distributed Lag (ADRL) approach to evaluate the
applicability of the trade led and domestic demand led growth (DDLG)
hypothesis using a sample of 12 SADC countries over the period 1994-
2019. The DDLG hypothesis is more applicable over both the short and
long run. The exports led growth hypothesis is not applicable while the
imports explain growth in the long run. There is joint causality from
domestic demand and imports to growth. Individual countries adjust to
the long-run equilibrium at different speeds, which confirms short-run
heterogeneity while long-term outcomes converge. The study offers
some policy implications
