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Does trade support global output growth? Further evidence on the global trade – global output connection

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  • Leon Podkaminer

    (The Vienna Institute for International Economic Studies)

Abstract

Using the standard tools of time series econometrics, this paper suggests that rising international trade may not have been supporting global economic growth (while growing global output seems to have supported growing global trade). Large and persistent trade imbalances, typical since the mid-1970s, are just one possible reason for trade no longer playing the positive role assigned to it in the mainstream trade theories. The second reason relates to the ‘race-to-the-bottom’ tendencies with respect to the wage rates which have developed under globalization.

Suggested Citation

  • Leon Podkaminer, 2021. "Does trade support global output growth? Further evidence on the global trade – global output connection," Bank i Kredyt, Narodowy Bank Polski, vol. 52(1), pages 23-36.
    • Handle: RePEc:nbp:nbpbik:v:52:y:2021:i:1:p:23-36
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    world income; world trade; globalization; wage-led growth; VEC;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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