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The relationship between economic growth, exports and imports in Pakistan from1990Q1 to 2008Q1 has been examined. Economic growth and exports are not cointegrated suggesting the absence of long-run relationship. Causality in Granger’s sense is absent between economic growth and exports as well as between imports and economic growth. Impulse response functions show that income, exports, and imports have negative impact on each other. Variance decomposition analysis demonstrates that imports appear to have a stronger impact on exports relative to income. The effect of exports on economic growth is modest. This paper finds no support for export-led growth hypothesis in Pakistan. Strong development of agriculture on modern scientific lines is suggested.
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