Trade, Extent of the Market, and Economic Growth 1960-1996

UPF Economics and Business Working Paper No. 765

33 Pages Posted: 12 Jul 2004

See all articles by Antonio Ciccone

Antonio Ciccone

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Francisco Alcalá

Universidad de Murcia. Facultad de Economia y Empresa

Date Written: December 2003

Abstract

We find that trade and domestic market size are robust determinants of economic growth over the 1960-1996 period when trade openness is measured as the US dollar value of imports and exports relative to GDP in PPP US$ ('real openness'). When trade openness is measured as the US dollar value of imports and exports relative to GDP in exchange rate US$ ('nominal openness') however, trade and the size of domestic markets are often non-robust determinants of growth. We argue that real openness is the more appropriate measure of trade and that our empirical results should be seen as evidence in favor of the extent-of-the-market hypothesis.

Keywords: Extent of the market, institutions, growth

JEL Classification: F43, O40

Suggested Citation

Ciccone, Antonio and Alcalá, Francisco, Trade, Extent of the Market, and Economic Growth 1960-1996 (December 2003). UPF Economics and Business Working Paper No. 765. Available at SSRN: https://ssrn.com/abstract=563854 or http://dx.doi.org/10.2139/ssrn.563854

Antonio Ciccone (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34 93 542 1669 (Phone)
+34 93 542 1746 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Francisco Alcalá

Universidad de Murcia. Facultad de Economia y Empresa ( email )

Campus de Espinardo
Espinardo, Murcia 30100
Spain
34-868883767 (Phone)
34-868883758 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
176
Abstract Views
1,324
rank
171,723
PlumX Metrics