Payame Noor University Economic Growth and Development Research 2228-5954 7 28 2017 09 23 Estimated Interactions between Non-Oil Exports and Economic Growth through the Quantitative and Qualitative Strengthening of Inputs; MS-VAR Approach Estimated Interactions between Non-Oil Exports and Economic Growth through the Quantitative and Qualitative Strengthening of Inputs; MS-VAR Approach 17 32 2712 FA Ali Mahdiloo Ph.D. Student of Economics, Tabriz University, Tabriz, Iran. Hosein Asgharpour Associate Professor of Economics, Tabriz University, Tabriz, Iran Mohammad Mehdi Barghi Oskooei Associate Professor of Economics, Tabriz University, Tabriz, Iran Journal Article 2015 12 08 There are two major views on the subject of the relationship between the development of non-oil exports and economic growth. In first opinion, non-oil exports leads to economic growth through the increase in quality of inputs. In second opinion, economic growth will increase non-oil exports throughquantitative strengthening of inputs. In non-linear models there are the ability to calculate relationship between variables and causal variables in different regimes. For this reason non-linear causality models can have better results than linear causality models. For this purpose in this study a Markov Switching model is used to investigate non-linear causal relationship between economic growth and non-oil export in the years 1973-2013. The results indicate that in first regime (high growth) and second regime (low economic growth), there is no causality between exports and economic growth. The reason is lack of sufficient attention to production of other economic sectors during the oil boom. As a result, it causes the weakening of production, reduction of domestic production and international competitive power and finally reduction of the share of exports of goods and services in economic growth. There are two major views on the subject of the relationship between the development of non-oil exports and economic growth. In first opinion, non-oil exports leads to economic growth through the increase in quality of inputs. In second opinion, economic growth will increase non-oil exports throughquantitative strengthening of inputs. In non-linear models there are the ability to calculate relationship between variables and causal variables in different regimes. For this reason non-linear causality models can have better results than linear causality models. For this purpose in this study a Markov Switching model is used to investigate non-linear causal relationship between economic growth and non-oil export in the years 1973-2013. The results indicate that in first regime (high growth) and second regime (low economic growth), there is no causality between exports and economic growth. The reason is lack of sufficient attention to production of other economic sectors during the oil boom. As a result, it causes the weakening of production, reduction of domestic production and international competitive power and finally reduction of the share of exports of goods and services in economic growth. https://egdr.journals.pnu.ac.ir/article_2712_d3fcdbf9cc83221afce9211bdbe04180.pdf