<p>We modeled the interconnectedness of major macroeconomic variables and their causal directions. Time series data from the years 1991 to 2018 was collected on major macroeconomic variables from the National Bank of Ethiopia and generated to quarterly data using standard temporal disaggregation techniques. The Vector Error Correction Model (VECM) was fitted for modeling long-run and short-run dynamics among major macroeconomic variables. The finding indicated that exchange rate(ER), money supply(M2), and tax revenue(TAX) have a significant positive impact on the real gross domestic product (RGDP) growth and consumer price index(CPI). The error-correction term was estimated to be negative and statistically significant (-0.731, t-test statistic=-3.523). This indicates the existence of a statistically significant long-run equilibrium relationship among real gross domestic product (RGDP), the consumer price index (CPI), the exchange rate(ER), the money supply(M2), and tax revenue(TAX). The results also revealed that in the short run, a 1% increase in RGDP growth in the previous period reduces current RGDP growth by 0.56%, while RGDP growth two periods earlier reduces current growth by 0.24%, and a 1% increase in ER decreases RGDP growth by 0.38%. It was also found that there was unidirectional causality running from real gross domestic product to the exchange rate, from the exchange rate to the consumer price index, consumer price index to tax revenue, and money supply to exchange rate and tax revenue, whilst bidirectional causality existed between the consumer price index and money supply in the short run. 90.05% of the variability in the RGDP fluctuations is explained by its own innovations, and the remaining 9.95% is explained by CPI (1.71%), ER (0.70%), M2(5.67%) and TAX(1.87%). The implication of the study is that exchange rate stability, prudent monetary expansion, and efficient taxation policies are crucial for promoting and sustaining RGDP growth.</p>