Trade, Growth and the Size of Countries

56 Pages Posted: 22 Jan 2003

See all articles by Romain T. Wacziarg

Romain T. Wacziarg

UCLA Anderson School of Management; National Bureau of Economic Research (NBER)

Enrico Spolaore

Tufts University - Department of Economics

Alberto F. Alesina

Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: January 2003

Abstract

Normally, economists take the size of countries as an exogenous variable which does need to be explained. Nevertheless, the borders of countries and therefore their size change, partially in response to economic factors such as the pattern of international trade. Conversely, the size of countries influences their economic performance and their preferences for international economic policies - for instance smaller countries have a greater stake in maintaining free trade. In this paper we review the theory and the evidence concerning a growing body of research that has considered both the impact of market size on growth and the endogenous determination of country size. We show that our understanding of economic performance and of the history of international economic integration can be greatly improved by bringing the issue of country size at the forefront of the analysis of growth.

Suggested Citation

Wacziarg, Romain T. and Spolaore, Enrico and Alesina, Alberto F., Trade, Growth and the Size of Countries (January 2003). Harvard NOM Working Paper No. 03-14; Harvard Institute of Economic Research Working Paper No. 1995; Stanford GSB Working Paper No. RP1774. Available at SSRN: https://ssrn.com/abstract=367263 or http://dx.doi.org/10.2139/ssrn.367263

Romain T. Wacziarg

UCLA Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Enrico Spolaore

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

Alberto F. Alesina (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
617-495-8388 (Phone)
617-495-7730 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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