The causal relationship between urbanization and economic growth in US: Fresh evidence from the Toda–Yamamoto approach

ANDISHEH SALIMINEZHAD (Department of Economics, Faculty of Economics and Administrative Sciences, Near East University, Nicosia, Northern Cyprus, Mersin 10, Turkey.)
PEJMAN BAHRAMIAN (Senior Economist, Cambridge Resources International, Inc. (CRI), MA, USA)

Journal of Contemporary Urban Affairs
Vol. 3 No. 2 (2019): Journal of Contemporary Urban Affairs

This study aims to investigate the causal relationships between urbanization and economic growth for the United State during the period 1960- 2017. We utilize the time series technique known as Toda-Yamamoto method, which efficiently works even with the variables co-integrated of arbitrary order. Empirical findings suggest a unidirectional Granger causality running from urbanization to economic growth, and no Granger causality detected from economic growth to urbanization for the long run. The findings prove that urbanization is nominated as a main driving force of economic growth.