Transition Dynamics and Trade Policy Reform in Developing Countries

CEPR Discussion Paper Series No. 1452

Posted: 11 Apr 1997

See all articles by Hakan Nordstrom

Hakan Nordstrom

Swedish Board of Trade

Joseph F. Francois

University of Bern - Department of Economics; Centre for Economic Policy Research (CEPR); Vienna Institute of International Economic Studies (WIIW); University of Adelaide - School of Economics

Clinton R. Shiells

International Monetary Fund (IMF)

Date Written: July 1996

Abstract

This paper emphasizes the relevance of classical transition dynamics for trade policy, particularly for developing countries. The empirical evidence from cross-country growth regressions points to important transitional growth effects related to trade policy reforms. The paper employs a simple growth model to examine these effects, formally developing the transitional dynamics and contrasting policy reforms in countries near steady state (developed countries) with countries far from steady state (developing). Policy reforms that appear identical in a static or steady-state framework can have a substantially greater impact on developing countries, once transitional accumulation effects have been accounted for.

JEL Classification: F13, F43

Suggested Citation

Nordstrom, Hakan and Francois, Joseph F and Shiells, Clinton R., Transition Dynamics and Trade Policy Reform in Developing Countries (July 1996). CEPR Discussion Paper Series No. 1452. Available at SSRN: https://ssrn.com/abstract=4819

Hakan Nordstrom (Contact Author)

Swedish Board of Trade ( email )

Sweden

Joseph F Francois

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, CH-3001
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Vienna Institute of International Economic Studies (WIIW) ( email )

Oppolzergasse 6
A-1010 Vienna
Austria

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia
+61 8 8303 5540 (Phone)
+61 8 8223 1460 (Fax)

Clinton R. Shiells

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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