Trade, growth and income
AbstractThis paper uses the instrumental variable threshold regressions approach of Caner and Hansen (2004) to investigate whether the trade's contribution to the standard of living and long-run economic growth varies according to the level of economic development. The empirical evidence shows that greater trade openness has strongly beneficial effects on growth and real income for the developed countries but significantly negative effects for the developing countries. The heterogeneity in the relationships suggests that greater international trade and integration may foster uneven development and hence contribute to more diverging economies. In addition, the link of trade to economic performance is found to work through both capital accumulation and productivity growth channels. Finally, the evidence shows that real effects of trade also depend on the level of financial development, inflation and trade openness.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal The Journal of International Trade & Economic Development.
Volume (Year): 20 (2011)
Issue (Month): 5 (July)
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Web page: http://taylorandfrancis.metapress.com/link.asp?target=journal&id=104717
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- Ulaşan, Bülent, 2012. "Openness to international trade and economic growth: A cross-country empirical investigation," Economics Discussion Papers 2012-25, Kiel Institute for the World Economy.
- Daniel Sakyi & Jose Villaverde & Adolfo Maza & Krishna Reddy Chittedieonardo, 2012. "Trade Openness, Growth and Development: Evidence from Heterogeneous Panel Cointegration Analysis for Middle-Income Countries," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID.
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