Trade and Economic Growth: A Re-Examination of the Empirical Evidence
24 Pages Posted: 24 Feb 2012
Date Written: February 23, 2012
Abstract
While trade integration is often regarded as a principal determinant of economic growth, the empirical evidence for a causal linkage between trade and growth is ambiguous. This paper argues that the effect of trade in dynamic panel estimations depends crucially on the specification of trade. Both from a theoretical as well as an empirical point of view one specification is preferred: the volume of exports and imports as a share of lagged total GDP. For this trade measure, a positive and highly significant impact on economic growth can be found.
Keywords: Openness, Trade, Growth
JEL Classification: F11, F43, C23
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Trade, Foreign Investment, and Industrial Policy for Developing Countries
-
Is the Washington Consensus Dead? Growth, Openness, and the Great Liberalization, 1970s-2000s
-
Is the Washington Consensus Dead? Growth, Openness, and the Great Liberalization, 1970s-2000s
-
Trade and Income -- Exploiting Time Series in Geography
By James Feyrer
-
Trade and Income -- Exploiting Time Series in Geography
By James Feyrer
-
Distance, Trade, and Income - the 1967 to 1975 Closing of the Suez Canal as a Natural Experiment
By James Feyrer
-
Is There Rent Sharing in Developing Countries? Matched-Panel Evidence from Brazil
-
Measured Aggregate Gains from International Trade
By Ariel T. Burstein and Javier Cravino
-
The Structure of Protection and Growth in the Late 19th Century
By Sibylle Lehmann and Kevin H. O'rourke
-
The Structure of Protection and Growth in the Late 19th Century
By Sibylle Lehmann and Kevin H. O'rourke